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New Chip Represents Key Step in Adoption of NFC

NXP released the first Near Field Communications (NFC) chip that complies with the single wire protocol (SWP) standard, a specification analysts and a leading industry group have called an important milestone to NFC commercialization.
May 13, 2009This article was originally published by RFID Update.

May 13, 2009—NXP released a new chip that is expected to play an important role in paving the way for adoption of Near Field Communication (NFC) payment systems. The PN544 controller chip that NXP announced this week is the first to support the SWP version 2.0 standard which simplifies integration into mobile phones and other handheld devices. The GSM Association (GSMA) Pay-Buy-Mobile initiative, an industry effort to set NFC payment system standards and promote adoption, last year said having commercially available SWP-compliant chips available by mid-2009 would be an important milestone in NFC evolution.

"By the end of this year there will be a number of phones available with the SWP protocol, and they will be in full production next year," Chris Feige, NXP's general manager for NFC told RFID Update.

NXP has released samples of the PN544 to handset manufacturers and other customers and expects to begin mass production of the chip later this year. He expects customers to begin consumer trials of the technology by the end of the year.

"Standardized SIM-based NFC chipsets provide a solid foundation for NFC adoption. They provide handset manufacturers, mobile operators, banks, transport operations and a host of other players, with a platform for their NFC developments," ABI Research analyst Jonathan Collins said in NXP's announcement. "Standardization will also help other organizations align their businesses to support mobile contactless services -- stimulating the market further."

There are three basic architectures that mobile phone, PDA and other device manufactures use to embed NFC capabilities into their products. The architectures differ mainly by how security is implemented. The NXP PN544 chip supports all three architectures and includes other features to make it easier for manufacturers to design and build NFC functionality into their products. NXP also released a software stack to support PN544 integration and application development.

The PN544 also supports multiple standards and payment protocols, including MIFARE, FeliCa, ISO/IEC 14443 Types A and B and ISO 15693. That means cell phones and PDAs with the chip can participate in multiple contactless payment programs in use today. For example, a consumer could use her cell phone to pay a public transportation fare (which uses one protocol) and to purchase products from a merchant participating in the PayPass and payWave programs offered by MasterCard and Visa, respectively, which use different protocols.

ABI Research previously identified such converged payment systems as an important development in NFC evolution (see ABI: Signs of NFC Payment System Convergence). With the NXP chip moving toward wide availability, it will be easier for mobile device makers to mass produce products that can support multiple payment systems. Having more devices available and being promoted could also motivate application developers to create more applications for the market, which is seen as another important development necessary to spur NFC adoption.

"We were recently looking at the latest NFC market projections, which show low numbers of sales but with some upside," Feige said. "I think the upside can happen very easily if there is a killer phone with some nice NFC applications."
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