RFID Gazette

What happens when you lose one? Can the finder/ thief use it to make purchases? Supposedly there are safeguards, but since you can just "tap" your phone at, say, a cashless vending machine, I don't see how that'd stop a thief. I've yet to come across any articles that explain this.

Most people guard their cell phones closely, so it won't be a big issue. Not yet. But since ABI Research predicted back in 2004 that that 50% of phones would have NFC by 2009, it'll become a growing issue. It happens; phones get misplaced or stolen. And if phones become our wallets, isn't that more incentive for some people to steal them? That is, if it's easy to use any stored credits. And will it be easy for a thief to determine what your recent purchases were?

I'm assuming you can have your phone disabled if it gets "misplaced", though you'd have to find a phone elsewhere to make the call. (To whom, exactly? I've not seen any indication that payment credits on NFC phones are handled by credit card issuers or some other organization.)

There's a similar problem for contactless credit cards, since a signature is not required for transactions under $25 for most cards. Sure, these can be easily cancelled, and the transactions removed from a card carrier's credit statement, so the point is moot. But as for a lost NFC phone, I'm guessing that knowledge of what happens is only available to those who have one.

A roundup of recent RFID-related news.

NFC Vending Machine Demo
RFID in Japan has a YouTube video showing someone buying a drink from a vending machine and paying for it with their NFC-enabled cell phone.

RFID Implants For Payment Systems
A nightclub in Barcelona, Spain is allowing patrons to use implanted RFID chips to enter a VIP area and pay for drinks. Said one of the owners of the club:

I know a lot of people have fears about it. Having a radio-transmitting chip under your skin makes you very unique.

Right. So do horns sticking out of your head, which I'll have implanted before an RFID chip.

Dual-Purpose RFID Labels
Checkpoint Systems is introducing an inventory tracking and anti-theft system for retailers. The system uses RFID labels that serves the dual purpose by having two different circuits. This is apparently worrying privacy advocates who feel the system might track customers who chips after a purchase.

It's expected that by 2011, there'll be nearly 110M users of contactless payment cards in use in the United States, with purchases totalling nearly US$15B. This will be a rise from nearly 30M cards in 2006, which is far behind many other other countries. The market that card issuers are going after is for small-ticket purchases of typically US$25 or less per transaction. Such transactions will not require a signature, thus supposedly speeding up shopping and possibly luring consumers from other payment methods. These figures do not include payments by mobile phone, which are also expected to grow in the US, thanks to an increasing number of NFC-enabled phones and vending machines.

Six large vending machine companies in the United States plan to outfit their vending machines with  contactless payment technology. The technology will accept MasterCard PayPass cards and key fobs.

An announcement earlier this month from MasterCard and USA Technologies stated that 6,000+ vending machines in the US would allow for contactless payments using NFC-enabled cell phones. Late last year, USA Technologies had announced plans to install contactless card readers on 10,000 vending machines.

Contactless payment technology vendors are hoping to capture the sub-$25.00 per transaction market of vending machines and convenience stores. While there are the two types of contactless payment (card/fob and cell phone), the cell phone method is at a disadvantage since there are currently few NFC-enabled phones in the United States and Canada. Contactless keyfobs and credit cards, on the other hand, have the distinct advantage of being easily distributed.

The use of RFID, particularly NFC (Near Field Communication) at sporting events has been so functionally successful that it's really seems to be catching on. In addition to being used for preventing counterfeit ticket use and for crowd management (seating, gates, etc.), RFID is also being used for payment at concession stands and souvenir shops, either with keyfobs or contactless payment/credit cards. Several sports teams in the NHL and the NBA will now be allowing fans to use the contactless MasterCard PayPass cards to speed up concession stand payments. If you've ever been to a sporting event, you know how long you might wait in line, meanwhile missing the action.

NFC, or Near Field Communication, is a technology that's been in use in Asia and Europe for a few years, allowing consumers with appropriate NFC-enabled cell phones to pay for all manner of self-payment purchases, such as bus fares and movie tickets, or for items from vending machines.

To date, that hasn't really been the case in North America. However, MasterCard and USA Technologies are in the process of pushing out 6,000 vending machines in over twenty American cities. Customers can use an NFC phone for purchases, thanks to the new e-Port technology from USA Technologies.

One thing I see holding back the popularity of such vending machines is the lack of NFC phones, though Nokia is making progress in that regard. Still, ABI Research said back in 2004 that by 2009, about 50% of all cell phones would have NFC. What remains is to see whether consumers become comfortable using such a payment method.

Mobile Payments Initiative
Two organizations have launched a joint initiative for the financial services industry to enable mobile payments. They are looking at two types of payment. One would be for purchases via NFC and other contactless technology. The other would be transfer of funds between the accounts of two consumers. It should be noted that PayPal, the payments processor owned by eBay (who also own the Skype VoIP software company) already allows mobile payments through SMS text messaging.

Apple Into RFID?
Not quite. However, they have filed a patent for a wireless home networking system that uses an RFID reader. The system would assume that a variety of devices (laptop, PDA, iPod) would have an RFID tag and the network would automatically configure a network connection for it. [via RFID Update; they have a link to the patent.]

Very exciting application. I heard nothing about this until now. The drawback is that Apple technology has traditionally been very singular, with the company typically not licensing/ authorizing clones. This sounds like a fascinating application, but it might only ever be used for Apple products.

If You Can't Beat'em, Confuse'em:
So IOActive's researcher Chris Paget was told to put off his "clone RFID cards" talk at the Black Hat conference recently, based on the charge that the demonstration would violate HID Global's patents in card readers. Huh? Defeat "enemies" with confusion? I don't even know where to start with this one. The validity of this claim is questionable. Other RFID presentations did continue, however. Still, this is a bad precedent and stinks of bullying.

Late last week, I went to a sub-post office to get and send a money order for a credit card I was accepted for. As I was signing my money order, a young woman paid for a purchase with her credit card. She was surprised when the clerk didn't ask her to sign a receipt, and pointed this out. The woman behind the counter indicated that it wasn't necessary (the younger lady had an RFID credit card, which surprisingly can be used without a signature). She had a puzzled look on her face and chuckled nervously.

I don't blame her; I'm not big on RFID credit cards. But then I thought, what am I going to do if my new card has an RFID chip? Legally, the card belongs to the issuer. Disabling the chip could be considered an act of vandalism. So that leaves two options: (1) don't use the card. (2) get an anti-RFID sleeve/ wallet. Since I want the card, I haven't got much choice, do I?

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Big In Japan
McDonald's restaraunts in Japan will allow customers, later this year, to using NFC-enabled mobile phones. (Nokia is one company that has already rolled out NFC phones to be used for payments.)

Hyundai Adopts RFID
Hyundai-Kia Motors is implementing RFID in their Supply Chain to collect real-time distribution information. They are moving from applied bar code labels. They'll be using UPM Raflatac tags.

Dallas Newspaper To Use RFID
The Dallas Morning News will be the first newsaper to use the RFID-enabled Smart Cart system from Cannon Equipment. The system helps to track cart shipments.

Contactless credit cards that use RFID technology have been growing in numbers over the past two years. With their increased presence comes increased security risks, however. A New York Times article from October 23, 2006 pointed out some of the major security flaws in these contactless credit cards. So what can be done? Ask the Advisor has some answers in their recent article Can Contactless Credit Cards Be Hacked? 5 Tips to Stay Secure. It's worth a read.