Inside Secure to Promote New Type of Tags for Use with NFC Phones

Jan 6 2011

NFC chip supplier Inside Secure has announced support for a new category of low-cost but nonstandard RFID tags that it said could be used in place of standard tags to send data to NFC phones.

The tags, called "RF barcodes" by their maker, Silicon Valley-based Kovio, could be attached as "smart labels" to product packages and to smart posters in stores to enable consumers to receive product details, promotional offers, coupons, loyalty points and nutritional information by tapping their NFC phones on the tags. In-store mobile promotions are among the most anticipated uses for NFC tags.

The Kovio tags are not actual bar codes, but printed integrated circuits that send data using the ISO/IEC 14443 standard frequency, 13.56 MHz, according to Kovio. It is targeting the market for bar codes on product packages and also low-cost transit fare and entertainment venue tickets. The tags are also used for inventory tracking. At volume production, the company said the tags could be produced at 5 U.S. cents or less apiece, which would be significantly lower than standard NFC tags.

"They can be manufactured with very short lead times–this is the key difference in the silicon ink versus silicon foundry techniques," Charles Walton, chief operating officer for France-based Inside Secure, formerly Inside Contactless, told NFC Times. "They’ve (Kovio) commercialized very quickly and at a very low cost, these devices. They are a very reliable, very elegant, cheap simple solution."

Both the Kovio tags and standard NFC tags could store small amounts of data, such as URLs or SMS codes that could open mobile Internet connections on NFC phones, enabling consumers, for example, to access product information or coupons.

Update: Kovio's vice president of business development, Vik Pavate, said consumer product companies will not put conventional RFID tags on millions of different types of products because the tags are too expensive–he contends they are stuck at a 10- to 15-cent price point apiece.

"The conventional silicon platform is not capable of getting to where we are now," Pavate told NFC Times"In the context of brand promotion, it’s like a Ferrari–very expensive. No brand company will make an investment at the price of conventional silicon. They’ve (silicon manufacturers) been talking about getting down to 5 cents for years." 

Without affordability, there will be no widespread tagging of products in stores. And that would greatly reduce the marketing and advertising reach of product makers and merchants, as they try to interact with consumers on NFC phones, he said, adding that Kovio's goal is to reduce the price of its tags to a penny apiece in a few years. End update.

Nonstandard Technology
But while the Kovio tags support the standard contactless radio frequency, they are proprietary and do not comply with any of the four tag types standardized by the NFC Forum.

Walton acknowledged it would require what he termed "slight modifications" to Inside’s MicroRead and SecuRead NFC chips to read the Kovio tags.

For NFC phones using other NFC chip makers’ products to read the Kovio tags, those chip makers would also have to make modifications, after concluding agreements with Kovio.

Inside points out its NFC chips are able to read standard NFC tag types as well, but its promotion of nonstandard tags is unlikely to sit well with the NFC Forum, a standardization and trade association. While the forum’s four standard tag types are manufactured or licensed by private companies, Broadcom, NXP Semiconductors and Sony, their inclusion in the standard means that NFC Forum-certified phones should be able to read them without modification to the NFC phone chips. 

"Standards make life easier to create growth in the market much faster," Jeff Miles, director of mobile transactions for NXP, told NFC Times, when told of the Inside announcement.

Kovio is itself a member of the NFC Forum, and Inside hopes the company's tags one day will become part of the standard. That is possible, though it would create a fifth tag type.

Update: When asked by NFC Times whether it viewed a possible rollout of nonstandard Kovio tags a potential problem, and if it would consider standardizing the technology, NFC Forum Chairman Koichi Tagawa responded only that the forum is a "member-driven organization," and as such, "we have a process in place for members to propose new technologies for the forum’s consideration." End update.

The Kovio tags are on display this week at the International Computer Electronics Show in Las Vegas.

Kovio's Pavate said the company has raised $85 million in venture capital.

Tom Zind contributed to this article.

HEADLINE NEWS

Xiaomi's Mi Pay Joins Crowded ‘OEM Pay’ Market in China, as Device Maker Seeks to Slow Slide in Sales

NFC Times Exclusive Insight – Adding mobile payments capabilities to flagship smartphones appears to be a must-have feature as OEMs fight for market share in China’s hotly contested phone market.

OTI Continues to Cut Costs and Position Itself for Growth, but Won’t Project When It Will Finally Turn Profit

NFC Times Exclusive Insight – Contactless reader and NFC vendor On Track Innovations reported lower expenses and says it has positioned itself to earn more revenue from services in addition to its reader sales and possible NFC patent income–all in hopes of making the company profitable for the first time in its history. The question of when that will happen remains unanswered, however, and OTI doesn’t provide guidance.

Apple Strikes Back at Australian Banks Seeking to Bargain Collectively, Branding Them a ‘Cartel’

NFC Times Exclusive Insight – Apple has responded to a request to regulators by four major Australian banks to jointly negotiate terms for their adoption of Apple Pay and to boycott participation during the negotiations with a strongly worded letter, branding the group’s proposed action worthy of a “cartel” that would “harm consumers, lead to less competition and less innovation and set a troubling precedent.”

Visa Policy on Alternate PANs Leaves Cardholders Out in the Cold in Taiwan

NFC Times Exclusive – Fourteen banks in Taiwan launched mobile payments using host card emulation late last week or plan to do so in coming weeks, but none of the cards that the banks’ customers can load into their new Android wallet apps will sport the Visa logo–one of the two main bank card brands in Taiwan. 

Reports: ZTE Pay to Join Crowded Mobile Payments Market in China

NFC Times Exclusive Insight – Credible reports say that Chinese smartphone manufacturer ZTE plans to join the “OEM Pay” club, and that the company has signed an agreement with payments network China UnionPay to deploy an NFC-enabled mobile payments service in China.

STMicroelectronics Sees Booster Technology as Way to Become Competitive in NFC Wearables, Smartphone Markets

NFC Times Exclusive Insight – Chip maker STMicroelectronics is hoping its $77.8 million-plus acquisition of the NFC assets of Austria-based ams AG will help it accelerate its move into the Internet of Things market, especially for wearables.

Taiwan Banks to Launch Mobile Payments with HCE, but Only with Mastercard-Branded Cards, Using Local Tokenization

Aug 4 2016

NFC Times Exclusive Insight –  More than a dozen Taiwanese banks and their mobile payments joint venture along with Mastercard plan to announce Thursday the launch of mobile payments using host card emulation, with more banks to follow.

NXP Reports Growth in NFC Revenue for Second Quarter Thanks to OEM Pay, Transit Ticketing in China

NFC Times Exclusive Insight – NXP Semiconductors reported growth in its Secure Connected Devices unit, which includes its NFC chips and secure elements, as the Netherlands-based chip maker is benefitting from the rollout of mobile payments services by smartphone OEMs and renewed interest in NFC transit ticketing in China.

Analysis: Apple Pay U.S. Transactions Growing but Base ‘Very Small’; and Rivals Not Apparently Catching Up

NFC Times Exclusive Insight – Apple’s boast this week that its mobile payments service accounts for three out of four contactless payments in the U.S. says little about the number of contactless transactions it is recording stateside, but does indicate that Apple has maintained its lead over rival NFC-enabled wallets.

Swiss Competition Officials Decline to Investigate Apple Pay Antitrust Complaint for Now

NFC Times Exclusive – A few days ahead of the official launch of Apple Pay in Switzerland earlier this month, Swiss consumer protection group Konsumentenschutz SKS filed a complaint with the Swiss competition officials, contending that Apple’s policy of locking down the embedded chips in its NFC devices is “monopolistic” and is a violation of the country’s antitrust laws. The regulator, however, has declined to launch a formal investigation, deciding to continue to observe the market for now, NFC Times has learned.

Australian Banks Form Bloc to Counter Apple’s ‘Divide-and-Conquer Strategy

Aug 10 2016

NFC Times Exclusive Insight – In an unprecedented move, four major Australian banks, including three of the country’s big four financial institutions, have asked the

Mastercard’s Planned Acquisition of VocaLink Could Speed Up Commercial Launch of Zapp’s Mobile Payments Service

NFC Times Exclusive –  Mastercard’s planned acquisition of UK payments company VocaLink may offer the final boost needed for VocaLink’s Zapp unit to launch its long overdue mobile payments service, the Pay by Bank app.