November 28, 2013
According to forecasts from eMarketer, online shoppers in the U.S will spend an astounding $262 Bn in 2013. Of the $262 Bn 16% or $41.68 Bn, will come from mobile commerce purchases made via Smartphone or tablet. As NFC has shown signs of resurgence there is another big news coming in. The biggest pain area with NFC uptake was that not many NFC terminals exist for accepting payments for remote or proximity payments. Intel in its 4th Generation core processor, already found in some high end PCs/Laptops, is having a NXP chip which helps users to make payments for goods by simply tapping their NFC enabled credit card against their device.
Intel with its NXP semiconductors has developed a new version PN544 PC controller which enables shoppers to pay for online purchases by simply tapping their contactless card or NFC phone to an NFC reader built into computers using fourth generation Intel Core processors.
The NXP Semiconductors PN544PC helps in capturing the credit card ID number and transmit it into an encrypted version to a merchant as well as to MasterCard’s Masterpass e-wallet service to complete a purchase.
The technology will provide customers with greater security and convenience says Michael Brun, NXP’s international product marketing director for product line infrastructure. Earlier customers were always worried while entering a credit card number and a security code as it is sent to the server, which creates a possibility of a virus or hacking program collecting the data and providing it to someone else.
Intel NXP will help in overcoming this problem to a greater extent with its Identity Protection Technology (IPT). The card information collected by the NFC reader is encrypted and thus it serves no use to potential thieves. The IPT stores a security passcode in the Intel processor. When a user makes a payment via MasterPass service it sends the security password to the masterpass services which takes less than a second to confirm that the device is authorised to make payments.
Intel has done a tie-up with MasterCard to provide the solutions that works on NFC-enabled credit card (i.e. Mastercard, Visa, Discover or American Express) registered with the masterpass wallet. The user visiting a participating merchant website can make a purchase using his NFC enabled credit card.
Steps that a user needs to follow in order to use Masterpass Wallet:
1.) User needs to register his computer and input his MasterPass Wallet ID number.
2.) Intel Indentify Protection technology is already loaded on the processor that will encrypt that ID.
3.) User needs to visit the merchant website, and check the online merchant participating in the MasterPass Wallet service.
4.) The website invites the user to select the Tap & Go button and make the NFC based transaction.
5.) The customer clicks on the link offered by the website and then taps his NFC credit card against the NFC reader symbol on his computer.
6.) The NXP NFC verifies the card.
7.) The Indentify Protection software in the processor sends the encrypted number with password to the server. Then the transaction is completed.
8.) The user could also choose to pay for the purchase using a non NFC enabled credit card, by entering a password.
Currently, about 20,000 online merchants participate in the MasterPass Wallet system, with more expected to join in the future. Some computers already include the Intel 4th Generation Core processor with NXP's PN544PC NFC reader chip, while all computers made with that processor in the future could have NFC capability. Tablets would also utilize the processor, thereby enabling individuals to make payments with their tablet even while at a store says Michael Brun.
The system is being employed currently in Canada, U.S, UK and Australia. The technology is to be made available through most of Western Europe as well as Brazil in the next month.
Two questions come up in my mind:
1. Why can't the Laptops or tablets with this chip, be used as NFC terminals at POS going forward?
2. If this chip and NFC enabled card system with Identity Protection Technology is so secure, it means we probably don't need to treat these online transactions as per high interchange rate (not treating them as CNP) ?