SHANGHAI, China – While the world was abuzz with mounting speculation on whether Apple’s iPhone 5 would be NFC-enabled, China Mobile was pursuing a “China-style” e-wallet solution for mobile handsets: using a SIM card instead of a mobile handset to embed RFID technology.
Call that as a poor man’s solution for NFC mobile handsets, but never underestimate Chinese ingenuity.
The SIM card-based proximity payment solution, compared to NFC-embedded mobile handsets, is less costly, more practical, and friendlier to both users and operators. Most importantly, it promises faster-to-implement e-wallet applications for the masses. “There is no need for consumers to buy a new NFC phone; they can just replace their SIM card,” said Mina Hao, executive chairman of Quanray Electronics.
Quanray, a Shanghai-based RFID start-up, has been a key player behind China Mobile’s proximity payment initiative. Others involved include Watchdata and NationZ, both Chinese companies.
Just to be clear, China Mobile’s SIM card-based mobile payment initiative isn’t new. The mobile operator has been pushing the idea since 2009.
However, because the SIM card sits right behind a battery inside a mobile phone, it hasn’t been easy for RFID chip companies to overcome the large signal attenuation problems caused by the battery. NationZ got around the problem by going higher frequency (using 2.4GHz SIM card, instead of 13.56MHz). Watchdata solved it by running a wire to connect a SIM card with antenna.
Hao explained that going higher frequency, like NationZ, would be problematic, because your SIM card would not be able to talk to the more than 100,000 RFID readers already used by the Shanghai Metro mass transit system. Running the wire to connect a SIM card with an antenna, as Watchdata has done, makes the card more fragile, he added.
To overcome such limitations, Quanray created a patented technology for hardware that can “penetrate the battery,” Hao said. Further, because it's based on a 13.56MHz SIM card, it can “leverage the existing infrastructure” (such as Shanghai Metro) to create additional mobile contactless payment features, he added. Quanray’s solution offers a bridge connecting the reader and the SIM.
“The bridge is passive so that it functions without battery, and it can wirelessly communicate with SIM and reader,” Hao explained. The bridge can be placed either at the phone’s battery cover or atop the reader. “Currently, our users are placing the bridge at the reader side (just like a sticker), so that a mobile user can simply replace his SIM card,” he added.
How does this stack up?Of course, when one compares an NFC-integrated phone with a SIM-card based mobile solution, the performance of the NFC-embedded phone “will be better,” said Hao, “because of the large antenna.” Further, the applications will be broader, because “an NFC phone can work at tag mode, reader mode and P2P mode. But a SIM-based NFC can only work at tag mode.”
That said, SIM-card based solutions will work for such applications as payment, ticketing, identity and access.
The SIM card-based solution works in existing phones, with transaction security controlled by the SIM card instead of the phone. It uses existing infrastructures (ISO 14443) in application systems, while it updates, downloads, enables and disables operation over the air, according to Quanray.
Next: How Quanray got started