Application analysis of NFC in the financial field

1 background

NFC (Near Field Communication), which is near field communication technology. It is in the same vein as RFID (Radio Frequency Identical Ion) and is a technology that uses radio waves with a frequency of 13.56 MHZ for short-distance communication within 10cm. There are several communication speeds, 106kbps, 212kbps, and 424kbps. You can choose from them. It can be used for wireless communication within 10cm with a maximum speed of 212kbps between various electronic devices such as mobile phones, digital cameras, PDAs, personal computers, and game consoles. .

With the in-depth promotion of RFID and the continuous development of NFC technology, NFC has become popular in the field of small payments and is rising in applications in other financial fields.

2 Applications of NFC in the financial field

2.1 Application of NFC in micro-payment

In the past ten years, foreign NFC technology has developed quite rapidly, especially in the exploration of small payment applications, such as electronic wallets, electronic money in bus tickets, entertainment and Sports tickets, using smart cards and mobile phones as carriers to become more and more popular. Wide range of applications.

Abroad, operators and equipment manufacturers in France, Germany, the United States and other places are also conducting relevant tests on mobile payment services and achieving success. In 2006, Philips, Nokia and other companies announced in Germany that after ten months of field trials, NFC technology had begun to be put into commercial use. At the same time, the NFC Forum, a non-profit industry association, was also formally established to promote the development and popularization of NFC, promote the implementation and standardization of NFC technology, and ensure collaboration between devices and services.

In our country, the application of NFC technology has developed particularly significantly in the past two or three years. Following Guangzhou, Shanghai, and Beijing, many cities such as Shenyang and Zibo have also promoted the use of municipal transportation cards. This application is closely integrated with the municipal government's subsidy policy, successfully simplifying bus procedures and reducing the cost of the bus system, and is welcomed by the general public.

Whether at home or abroad, RFID began to be applied in the most practical, simple and mature NFC micro-payment. However, the implementation on credit cards and bank cards is obviously more complicated. The reason is that the amounts involved are large, and there are also aspects such as how to coordinate the interests of financial institutions and other enterprises, financial supervision, and transaction risks. Despite this, some developed countries are actively promoting financial services. Our country has also explored some financial applications. However, compared with those countries, financial services in our country are almost completely operated within the jurisdiction of the government. The country emphasizes unified management. Although there are many foreign advanced technologies that can be introduced and implemented, it is difficult to implement them. At present, some financial and communication companies are engaged in standards and pilot projects, but the pace of implementation of financial applications is much slower than that of advanced foreign countries. I wonder when these work related to interest groups will be sorted out.

In addition to the above-mentioned institutional problems of complete public ownership of finance, there are also problems with the understanding of information security. For example, the second-generation resident ID Card overemphasized information security in its original design, production and issuance. It was relatively closed, and functions and secondary development could not be carried out. Currently, it is only suitable for typical applications such as airports and cannot be popularized. Originally a government-controlled resident information card, it should be widely used in medical, annuity, and other social security and public service fields. However, these most basic applications have to be left to the third-generation resident ID card. Almost all of these applications are related to finance and belong to the financial field. However, the second-generation ID card only has personal identity information, and this scope is very narrow. Before the introduction of the second-generation ID card, many foreign companies had suggested that the ID card could be implemented and should be used in multiple functions. However, the Ministry of Public Security rejected these suggestions and shut out foreign technology for reasons such as "national security." The current medical insurance reform will turn the past blue-skinned "medical guarantee" into RFID Cards. This is a major reform, but it cannot be combined with the second-generation card that is also based on the principle of RFID technology, which has to be considered a shortcoming. In addition, retirement certificates, annuity certificates, disability certificates, academic degree certificates, and other documents related to public utilities and finance cannot be compiled together with the resident ID card. This not only causes financial waste and inconvenience, but also creates problems for criminals. An opportunity to take advantage of. The current phenomenon of repeated bans on criminal individuals and gangs selling fake certificates and fake official seals is due to the fact that the certificates cannot use unified high-tech certificates. One card with multiple uses has become a trend in the current development of ID cards, which must be considered in the future development of smart ID cards in our country.

2.2 Promotion of NFC mobile phones

At present, many application tests have proven that the application of NFC technology has a positive effect in increasing supply chain transparency, saving time and labor costs, and improving work efficiency. Hot spots are mainly concentrated in the fields of logistics and warehousing, automatic highway toll collection, urban Intelligent transportation, production and manufacturing, etc. The next application hotspot of NFC will be mobile phones and automotive electronics.

Embedding non-smart cards into mobile phones not only takes advantage of the portability and processing capabilities of the mobile phone, but also utilizes the information exchange function of contactless smart cards. This technology can easily realize multiple functions such as electronic payment and data download. The combination of mobile phones and contactless smart cards It is the general trend. Compared with traditional smart card technical specifications, the biggest difference between NFC technology and traditional smart card technology is that it can support active mode and passive mode, which means it can turn your mobile phone into a card reader. This opens up a lot of development space for the application of mobile value-added services.