NFC in the Parking Industry
By Larry Berman
When shown a Nokia 6212 near field communication (NFC) phone and some MiFare tags, which performed simple tasks such as playing a song on my phone or taking me to a website, I got interested in creating an application that would reduce the complexities of parking at a meter with coins, credit cards and cell phones.
The problem with coins is having as many as you need to park in the ever-demanding rate increases in parking costs. Credit cards are not taken at all meters, and in a lot of cases, the meter does not read the card due to malfunctioning equipment.
The need for this new technology in using a cell phone to pay for parking will create unique and simplified parking applications.
A short-range, high-frequency, wireless communication technology, NFC is similar to Bluetooth and has a range of about 10 centimeters (about 4 inches). It can be used primarily in three instances:
• Card emulation: The NFC device acts like an existing contact-less card.
• Reader mode: The NFC device is active and reads a passive RFID tag, for example, for interactive advertising.
• P2P mode: Two NFC devices can communicate and hence exchange information.
Let me give you an example of how this technology works. On a typical day, you race out of the house and head to your transit station, wave your phone at the turnstile’s electronic reader, dash down to the platform and just make your train. The train pulls into your stop, and as you step off, you notice a sign for a fast-food restaurant advertising great coffee.
The sign has a logo signifying it’s a smart ad – an advertisement that transfers information to your phone when you tap it on the logo. You tap the smart ad and your phone displays the location: There’s one on 6th Avenue, right by your station.
You step around the corner and order that coffee. You pay for it by tapping your phone at the checkout stand. You remember that, because of your enrollment in a loyalty program, you also downloaded a 10% discount coupon when you tapped the smart ad. That amount was automatically deducted from the price of the coffee.
Thanks to NFC technology, the parking industry is undergoing a major shift in the way it will be doing business.
Smart cards were introduced in the 1990s. The public was slow to accept this payment method. Today, NYC sells about 14 million cards a year. In 2000, the credit card began to show up at multi-space meters; today, 20% to 40% of the transactions are credit cards.
In the past five years, a new technology has been introduced that enables a person to pay with a cell phone at a parking space by dialing a number, and entering a space ID and a length of time the person wishes to park. This technology has opened up very powerful resolutions to parking applications and permitting in authorized parking areas. Of all payment methods, this is the most innovative and flexible.
It offers a convenient alternative payment method. All that is needed for implementation are instructional stickers prominently placed on single-space meters or posts. It also can be used to handle payments in a pay-and-display environment when needed.
The versatile and robust technology allows the flexibility to accommodate an unlimited number of parking zones, durations, rate policies and permits, and can be tailored to accommodate the needs of any city.
Radio frequency (RF) tags, or transponders, when placed on parking meters or signage, can be programmed and when touched, will produce a parking transaction or take you to a website to register for any kind of parking program that requires it.
Using this technology, my new parking application will be called Touch ‘N Park. Just touch an NFC-enabled cell phone to the target area and an SMS message will be generated and sent to its central servers. When the parker returns, he can touch the RFID tag again to stop the parking transaction, if the city permits that.
At the present time, the only NFC-enabled phones are from Nokia. The next version of the iPhone is expected to have this technology built in. Other companies will release either mini-SD cards or attachments for smart phones to enable them to read the new NFC chips.
NFC mobile payments, for low transactions anyway, were expected to exceed $75 billion globally from 2009 to 2013 according to a 2008 study from UK-based Juniper Research. In the second report in its Mobile Payment Markets series, the firm found there was a “significant opportunity” for NFC mobile payment services, chips, phones and supporting services, especially as the market reaches its tipping point over the 2011 to 2013 period.
But, as the report’s author cautioned, “The Industry still needs to convince both consumers and merchants of the media of yet another payment mechanism on top of cash, checks, credit and debit cards, and to allay understandable (even if unfounded) fears and skepticism about the security of the mobile wallet.”
The report’s author, Howard Wilcox, said; “NFC will achieve traction initially in developed countries and regions, with Japan already leading the way with FeliCa-enabled phones. North America, Western Europe and countries such as Korea, Singapore and Australia are likely to see service take-up.”
With NFC technology, a new horizon for the parking industry is just ahead.
Larry Berman, President of Metered Concepts, can be reached at firstname.lastname@example.org.
Article Abstract from July, 2010