Increasingly, mobile devices such as smart phones now include near field communication (“NFC”) technologies allowing the mobile device to use NFC to communicate with readers, tags and other NFC devices. NFC devices generally are able to operate in three modes of operation—“reader/writer”, “peer-to-peer”, and “card emulation” modes. The different operating modes are based on the ISO/IEC 18092, 14443, and NFC IP-1 standards.
In reader/writer mode, the NFC device is capable of reading NFC Forum-mandated tag types, such as in the scenario of reading an NFC Smart Poster tag. The reader/writer mode on the RF interface is compliant with the ISO/IEC 14443 and FeliCa schemes. In peer-to-peer mode, two NFC devices can exchange data (e.g., two devices can share Bluetooth or WiFi link set up parameters, or exchange virtual business cards or digital photos). Peer-to-peer mode is based on the ISO/IEC 18092 standard. In card emulation mode, an NFC device appears to an external reader much the same as a traditional contactless smart card. Card emulation mode enables contactless payments and ticketing by NFC devices without changes to the existing payment processing infrastructure. Currently, a number of smart phones include NFC technology.
Many mobile payment schemes propose to use the NFC devices in “card emulation mode”. This mode allows the phone to serve as a repository of securely encrypted payment card credentials. Unfortunately, however, such usage requires that the payment card credentials be encrypted according to standards (or “schemes”) controlled by the payment card associations (such as Visa, American Express, etc.), and furthermore require that a secure encrypted chip called a “secure element” be present on the mobile device, adding cost and complexity to mobile devices. These encryption schemes are closed and proprietary and licensing is at the discretion of the owner of the scheme. The licensing can be expensive, and approval to participate is not guaranteed.
Further, the application processing required to implement the encryption schemes can be complicated. For example, one standard, referred to as “Globoplatform/JCOP” (which is essentially a Java runtime environment implemented on an NFC chip) requires that each payment card stored on the chip have its own Java application that manages the encryption and decryption of that card's data using a unique set of keys.
The complexity and security considerations associated with managing different proprietary key schemes have resulted in the creation of a new entity in the NFC payments ecosystem called a Trusted Service Manager. The TSM has the job of serving as a trusted intermediary charged with managing the movement of encrypted payment card credentials using multiple encryption schemes to consumers' handsets. The TSM exists since the different associations have different schemes, and the associations do not want to share their specific encryption and card management schemes with one another, among other considerations. It is estimated that use of a TSM can add as much as $5 per year in cost to having a payment card stored and managed on a consumers' smartphone using card emulation mode NFC.
The use of encrypted card emulation mode NFC to facilitate payments has also created the opportunity for handset makers, and wireless carriers to attempt to control the process of placing payment cards on devices equipped with NFC card emulation mode capable chips. Wireless carriers such as Verizon and ATT working together as part of the Isis Consortium, and handset makers such as Google are attempting to charge significant fees to payment card issuers either in the form of licensing fees or co-marketing dollars, something that is not appealing to banks, who are the primary issuers of payment cards. Industry experts believe that Isis is proposing that banks pay nearly $10 per payment card per year to make a payment card available in an NFC enabled mobile phone from ATT or Verizon.
It would be desirable to provide methods and systems for employing NFC features of mobile devices for use in payment transactions that solve these and other problems, including offer delivery and redemption, and the delivery and redemption of loyalty points and awards. Other advantages and features will become apparent upon reading the following disclosure.