Some industry observers believe the next generation of venders will successfully integrate the vending machine with a kiosk, thereby creating a device that not only dispenses product but also displays advertisements, captures user input, and creates an interactive purchasing experience. Accompanying this prognostication of technological advancement is the anticipation of a comprehensive contactless payment structure built on near-field communications (NFC) technology.
This is a technology that enables contactless payments by the wave of a cellular phone, not a card, tag or fob. NFC applications allow consumers to store credit card and debit card account information and to select a preferred method of payment, from those stored in the e-wallet of the phone, at the time of the transaction. Experiments by Visa International indicate that 89 percent of the participants who tried phone-based settlement preferred its convenience to alternate payment schemes. MasterCard also supports the cell phone as the next logical progression in proximity payment technology.
Near-field communication creates new possibilities
Forming a secure gateway to the connected world, NFC-enabled mobile devices (cellular phones and PDAs) allow consumers to store and access a variety of information. Bringing two NFC-enabled devices in close proximity of one another will initiate an automatic network communication configuration. NFC-enabled devices are then able to exchange and store data — including personal and financial data, text and voice messages, photo and video images, and MP3 files — without user intervention. By delivering intuitive connectivity, auto-configuration and smart key access, NFC can improve the speed of data transfer while enhancing its level of security.
Cell phones have new capabilities
Technology experts anticipate proximity payments will soon be added to cell phones as they become equipped with near-field communication technology. Instead of carrying credit cards, debit cards, loyalty cards, prepaid cards, hybrid cards or other settlement media, the cell phone will be used to settle transactions.
Transmitting payment information via cell phone to a POS terminal is sufficient cause for concern, but concern is compounded by the possibility of losing the phone. The solution may well be a biometrically controlled cell phone that requires the user's personal attributes to activate settlement.
Cell phone manufacturers are experimenting with several security options, including hardware modification (shell casement and fingerprint authentication) and software add-ons (custom shortcuts and voice authentication). Although in its infancy, cell phone settlement technology is expected to become popular as the next-generation consumers, already cell phone dependent, dominate the marketplace.
A real fear associated with cell phone settlement is the threat of misplacing or losing the handset. Phone absence could also mean a loss of transaction functionality. Security concerns point to a need for better authentication methodologies, including voice authentication and fingerprint authentication built into the phone, so that lost equipment is rendered unusable.
Security solutions: Fingerprint, voice
Fingerprint authentication is a cell phone with a fingerprint scanner built into its base. It requires the user to swipe a finger across its surface before the phone is operable.
NTT DoCoMo Inc. markets a biometric phone in Japan. The phone features an onboard fingerprint scanner to prevent unauthorized handset use. The user can lock or unlock the cell phone simply by placing a pre-enrolled finger on the scanner.
Cell phone voice authentication is keyed to recognizing characteristics of the user's voice and thereby activating the device. Although considered a low-to-medium-level identification technique, little modification is required as the necessary hardware is already in place and improved software is evolving. This approach allows speaker-verification based on stored data burned onto an existing microprocessor within the cell phone.