April 20, 2006 6:31 AM PDT

French road-test cashless technology

The tourist city of Caen in France's Normandy region is hosting a major trial of so-called near field communication--a mobile technology that can be used for anything from paying for groceries to finding out about one's hometown.

Near field communication (NFC) is already being used extensively across London, although people may not know it: The Oyster card carried by millions of commuters every day is based on the contactless technology.

By placing an NFC chip near a card reader, up to a distance of a centimeter or two away, data can be transmitted to and from the chip. In the case of the Oyster card, permission to go through a barrier can be granted and a fee for traveling on the underground deducted.

But the Caen project has a more far-reaching use in mind for NFC, with residents now packing NFC-enabled mobile phones to see if using the technology could catch on beyond public transportation.

NFC isn't new. Sony's FeliCa, a variant of NFC, is already big in Japan. In that country, more than 100 million FeliCa chips have been shipped, 10 million of which are carried on mobile phones. But the Caen trial is one of the largest both in terms of number of people and applications.

In an experiment involving companies such as Orange and Philips and the town's mayor's office, Caen's citizens have been road-testing the technology since late last year at a number of locations.

Among them is an underground parking garage; the town hall; a bus stop that can transmit timetable information; a cinema poster that downloads video trailers to people's phones; a local supermarket where people can pay for their groceries with their phone; and a tourist information sign outside the historic Abbaye des Hommes.

By touching a mobile phone against the Flytag logo at each of these locations, people can pay for services or receive information straight to their phone.

The practical side
The Abbaye is one of the more interesting showcases for the use of this technology. By placing the back of the phone against an NFC reader in the sign, information about the site is sent to the mobile by either an SMS or a phone call, functioning like a cheaper version of the audio guides found at many popular tourist attractions.

Laurent Duchelet, furniture restorer and self-confessed non-techie, is one of the Caen citizens taking part in the trial, using NFC every day when accessing a parking garage and every week to pay for his groceries.

"There's a practical side (to NFC). When I have my phone, I don't need to get out my cash, my card for the car park--and I can make phone calls. It's already normal for me," he told Silicon.com.

He added that the only problem he has experienced with the technology is the need to remember to keep the phone's battery charged.

Duchelet is one of 200 people taking part in the trial, which is in its first phase. The second stage will see the number of participants increased to 400 or 500.

Luan Le, design manager of NFC at Philips, said that the feedback from the trial so far has been "very positive" and that Philips expects the technology to get its commercial legs in 2007 or 2008.

He said the most crucial element in the potential success of NFC is the hardware--making sure phone makers are putting NFC models into the hands of consumers.

"The...main manufacturers are in the process of trying out the technology," he added.

While Samsung may be one of the most eager--its D500 devices are being used in the Caen trial--LG, Motorola, NEC, Nokia and Sony Ericsson are all members of the NFC Forum.

Cost will play a part in adoption of the technology, although the difference between NFC-enabled handsets and standard handsets was estimated to be $5 to $7, according to consulting company Deloitte & Touche in 2004.

The question of whether a person will pay to use the service is also yet to be decided. Currently, all the NFC-related services available in Caen are free, although they could theoretically require payment, depending on the service.

More than likely, it will be credit card companies, merchants and mobile operators that will bear the financial brunt of implementing the services. The benefits for them? Mobile operators could see lower customer turnover; stores could get customers through checkout stands faster; and credit card companies could shift more small payments away from cash.

There's also the potential for new services. For example, while people might be unwilling to pay for a full museum audio guide, they might be willing to spend a little extra money every time they want an extra bit of information.

Jo Best of Silicon.com reported from London.

See more CNET content tagged:
grocery, trial, Philips Electronics N.V., mobile phone, Motorola Inc.

4 comments

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"There's a practical side [to NFC]
Yes, there is a practical side to this. Governments won't have to purchase additional survelliance equipment to spy on people. They'll use hardware purchased by clueless people like those in Caen.
Posted by rcrusoe (1305 comments )
Reply Link Flag
Where this is leading to
I live in France and it has long been apparent to me that the French
government has the long-term goal of making each and every
commercial transaction traceable, presumably for tax purposes or
so the banks can take a cut.
For instance, in the sixties, all salaries below a non-indexed
ceiling had to be paid into a bank account. And, just recently the
Moneo cash card came out (that had to be topped up with a credit
card).
No doubt the plan is to eventually phase out cash altogether.
Posted by Dr Pangloss (1 comment )
Reply Link Flag
Death by a Thousand Payments
Sounds like a future classic:
Free for all intiially, get everyone to rely upon it, then charge - only a few cents - thereafter.

Every SMS message - 5 cents! every transaction - only 5 cents! Do it 5 to 10 times a day and wait for a threshold ammount before sending it to get real money via direct EFT withdrawl from checking account or a Credit Car.

End of year $150 to 300 they get in profit. Get 30 million people to use it (just the major US cities) and close to a billion gross profit a year for the micro payments.

Stolen phones will be worth even more - since you can buy things with it and no signature or verification required.

Gives to meaning to swipe and go!

Tom Philo
<a class="jive-link-external" href="http://taphilo.blogspot.com" target="_newWindow">http://taphilo.blogspot.com</a>
Posted by taphilo-2003685639374287843630 (130 comments )
Reply Link Flag
shortcomings of gadgets
This story just illustrates and re-inforces how mobile phones and gadgets in general are the weakest link in our security.

If the gadget was located some out of the way place under our clothes, then bluetooth technology could be used as the interface.
Posted by tim.murray (1 comment )
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