The results of a two year project investigating the potential of near field communication to replace meal vouchers, discounts coupons and gift vouchers have been released.
IBBT, a Flemish government research institute, has released the findings from an in-depth study into the potential of NFC to replace paper vouchers, including meal vouchers, discount coupons and gift vouchers.
The research findings are based on a two year project during which IBBT and its partners — Clear2Pay/Integri, Keyware and Accor Services — investigated the usability, legal aspects, security, applications and business model for NFC vouchers.
"The results of the so-called NFC Voucher study are promising and indicate that commercial implementation is feasible," the report concludes.
The study highlights the advantages of NFC over traditional paper vouchers for issuers, for merchants and for consumers:
Advantages for issuers were identified as including:
- Significant cost savings: printing, sending by mail, collecting, reading and clearing of paper-based Vouchers are time-consuming and costly operations. Replacing vouchers by an NFC-based alternative would tackle these difficulties.
- Eco-friendly: eliminates usage of paper.
Advantages for merchants include:
- Faster payments reduce queues at the counter.
- No need to collect paper-based vouchers and send them to the issuer. Clearing and settlement is done in a completely automated way i.e. the merchant initiates an online request to the issuer to clear the Vouchers he has collected.
Advantages for consumers include:
- Simplified voucher payments with a richer experience.
- User-friendly and convenient mobile payments: 'tap-and-go'.
- Portable and convenient: handsets are often at hand.
- Speed: contactless payments are fast, there's no need to search for paper vouchers.
- Flexible: usable wherever NFC accepting payment devices are available
- Voucher balance is consultable anytime on the mobile phone.
- Vouchers are transferable from one user to another.
- NFC vouchers residing on the handset are protected via a PIN code. Hence, when a phone is stolen or lost the NFC vouchers cannot be used without knowing the code.
The study also found that:
- The usability research indicates that consumer interest exists and that NFC vouchers are perceived as user friendly, especially thanks to the speed of payment and the fact that the application calculates how many meal vouchers need to be spent. The functionalities of the application correspond to the needs and expectations, though some improvements are still possible here.
- The legal research shows that electronic meal vouchers are not considered as electronic money so there is no bank license required for the issuers.
- NFC vouchers are transferred to the consumer from the issuer, which creates a direct liaison between the two parties. The research concerning the privacy issues unveils that the common opt-in conditions for advertising and data mining apply.
Security aspects were a special point of interest in the research. The team decided to take the approach of storing the NFC vouchers offline on a phone. "This approach bears close resemblance to the current paper meal voucher model and allows the transfer of NFC vouchers from one mobile phone to another without the intervention of a third party and without additional costs," the partners explain. "Because all transactions take place offline, without interaction of a host, the safety of the NFC Voucher system lies completely within the NFC phone."
During the project, the NFC vouchers were sent to recipients' mobile phones via MMS and were secured by a cryptographic signature, similar to the one used in the current Belgian electronic identity card.
However, "because of the high security demands, the current available technology is pushed to its limits, resulting in relatively modest transaction speed, when looking at it from a commercial viewpoint," the partners explain. "More recent cryptographic algorithms, which were not yet available on the demonstrator's mobile phone at the time of the study, and a better integration of components in the mobile phone, will considerably decrease the transaction times and make the technology demonstrated in this project suitable for commercial purposes."
An information pack containing details of the key findings from the study, a fact file, presentations and project partner overview is available on request by emailing email@example.com.