Digital Lifestyle: is the Octopus card on its last legs?

PUBLISHED : Friday, 15 February, 2013, 12:00am
UPDATED : Monday, 18 February, 2013, 3:31pm

The Octopus card may have created the cashless commute in Hong Kong, but since its inception in 1997 its tentacles have spread around the world. From London's Oyster to Tokyo's Suica, Singapore's EZ-Link and Brisbane's Go card, the smart card capable of acting as both ticket and cash is becoming ubiquitous in metropolitan areas. Although the basic concept is here to stay, it could be about to take a back seat to something even smaller.

By the end of this year some of us won't be flashing smart cards, but smartphones, with NFC - near-field communications - set to further revolutionise transport and shopping. It's not unlike the SIM card already in all mobile phones, a chip that identifies each individual user's account with a service the device performs (a phone call, or web surfing). NFC physically communicates with a reading device in a bus, train, shop, airport, or even the front door of your home; you just swipe your phone instead of a smart card.

Contactless payment in stores is up first in Hong Kong, and by the middle of this year customers of both Hang Seng Bank and PCCW Mobile will be able to swipe an NFC-equipped smartphone to pay for goods. The Hong Kong Monetary Authority promises that the banking industry's mobile payment infrastructure will be ready for NFC in the second half of this year.

The technology is simple enough. It's a short-range, low-power wireless link that can transfer small amounts of data using radio frequency between two devices a few centimetres from each other. Unlike Bluetooth, no pairing code is needed, and because of the low power involved, no battery is needed for the device being read. Effectively it turns your smartphone into a "reader", with a "writer" in a shop, train station or coffee shop identifying your account. NFC can establish a two-way link, so a smartphone with NFC can also receive vouchers, information or literally any other data.

As well as contactless payments, the birth of the truly "digital wallet", and inevitable promotions and advertising, NFC could also have a place in the smart city. Say, for example, there are delays on the MTR and you need to get home by another route. While normally you might search for a map or reach for your smartphone to fire up an app or make a phone call, NFC could theoretically let you swipe your phone against a pad on the platform labelled "travel advice"; the machine would read your phone, discover your most frequent journeys and plot your course home, getting you there the quickest way possible while also helping traffic monitoring systems. In short, NFC is part of the "smart" city that can predict where everyone is going, and when.

NFC could soon be conspicuous on your commute, replacing boarding passes and car parking tickets. It's probably already in your smartphone. Almost all Android-based handsets (including the Samsung Galaxy SIII, Nokia Lumia, BlackBerry Bold 9900 and Curve 9360) have had NFC tech inside them for a few years, with ABI Research predicting that 1.95 billion NFC-enabled devices will ship in 2017, largely in smartphones.

NFC will also enter the living room. Wi-fi routers will swap passwords for a simple tap from any smartphone, tablet or games console, with 395 million consumer electronics devices to ship in 2017 - in other words, NFC will be in everything. Sony, Samsung and LG have shown speakers and televisions that can be sent music, video and photos from a smartphone. Other NFC-controlled gadgets included a domestic cleaning robot, lighting and even a keyless car.

"It is only a technology, not a strategy," says Kerry Wong, managing director of PayPal Hong Kong, Korea and Taiwan, pointing out that carriers, retailers and banks so far favour different, competing modes of NFC that would require multiple NFC terminals in stores. "With NFC, information such as bank account and credit card numbers is stored on the device. Consumers need to have the device with them for the transaction."

Wong prefers a "digital wallet" more securely stored in the cloud - otherwise known as PayPal - though she points out that NFC only allows "proximity" payments. Swiping your phone in a coffee shop is fine, but what about paying for something online while drinking that coffee?

But there is momentum behind NFC and Hong Kong looks likely to again be in the vanguard. It will enable our smartphones to be a "touch and go" train or movie ticket, loyalty card, boarding pass, bank cards and keys, but at its core NFC is nothing more than the latest clutter-buster designed to empty pockets in more ways than one.