Tickets, good uses for tap-pay phones (AP)

By PETER SVENSSON, AP technology writer Peter Svensson, Ap technology writer – Thu Feb 21, 1: 01 pm ET

Barcelona, Spain – Cell phones are typically used to communicate with people far away. This year, you'll have the opportunity to do the opposite: communicate with things that are close enough to touch.

May not seem immediately useful, but phones will get some amazing features with the addition of chips for the so called near field Communications, a wireless technology with a range intentionally limited to a few centimeters.

The phones will be able to talk with the payment terminals designed for "smart cards" replacement of credit and debit cards. They could be used as a mass transit passes. You may tap two phones together for exchanging contact information.

Or you could touch a "smart tags" on a poster, the product or the sticker to get your phone to do something, such as retrieving information from the Internet or making a call to the customer support line. Yankee Group Analyst Nick Holland likens these tags for links that we get from Web page to Web page, only now are in the real world.

NFC is like a whole adding new capacity to the level of navigation GPS or a digital camera, Holland said.

The industry has spoken, including NFC phones for years, mainly to turn them into "electronic portfolios". Beyond a few tests, much has happened, except in Japan and Hong Kong, where these systems have arrested for mass transit ticketing.

But in larger cell phone trade show, held last week in Barcelona, Spain, it was clear that the impasse has loosened, in part because NFC chip are cheaper now. Million NFC-equipped mobile phones will be in the hands of consumers in the US and Europe before the end of the year.

Jim Balsillie, co-CEO of BlackBerry maker Research In Motion Ltd., said at the show that "many if not most" BlackBerry will NFC chip this year. Nexus S Google Inc has already one and Android software company last for other phones and that has the support of NFC. Nokia Corp., manufacturer in the world of mobile phones, is committed to putting the NFC chip in its next-generation smart phones.

According to jobs at Apple Inc., there is speculation that the new model of iPhone due this summer will have a NFC chip. Apple won't comment.

NFC transform limiting short-range communications in an advantage. When a NFC Terminal detects a NFC-equipped phone knows that it is because the user is keeping it right up close and to interact in some way — for example, paying a can of Coke.

This means that a lot of complexity that comes with creating wireless links — how to access a hotspot Wi-Fi or Bluetooth devices with each other "Association" — can be dispensed with. TAP and something happens. but the phone will probably still ask if you really want that can of Coke.

The simplicity of NFC it also allows you to cut through the complications of the current mobile payment systems, which allow you to send money via a text message or app. These systems have been most popular in Europe.

You can upgrade some current phones with NFC chip. Memory cards smaller that are accepted by some phones NFC functionality can be provided. With "jackets" for the iPhone that have for example chip NFC, are experimenting with both MasterCard and Visa.

But not all phones are compatible with these solutions, so that the most likely to get NFC in the hands of the consumer with new handsets. Research firm Yankee Group estimates that there will be about NFC-enabled phones to 151 million in 2014, up from 834,000 in 2010.

The broad support from phone manufacturers comes after almost a decade of much talk but little action. Bill Gajda, head of Visa Inc. 's push into mobile payments, said that the idea of NFC has faced a series of problems of egg and chicken ".

The creators of the phone did not include the chips in their phones whether wireless carriers don't want them. Wireless carriers not seen any use for the chip if merchants have terminals that accept them. Merchants don't want to invest in terminals, if there would be no phones use them.

With phone makers and wireless carriers now supporting the idea, the hope is that shops will take the jump too, Gajda, he said. Corp restaurants of McDonald's USA and a few other chains already contactless payment terminals are installed to accept cards that work on a principle similar to NFC. When New York City taxi cabs have been updated to accept credit cards from two years ago, they had too contactless terminals.

The Smart Card Alliance estimates that there are half a million contactless terminals in the u.s., in positions of 150,000 to 200,000. That compares perhaps 6 million locations in the United States with traditional card readers, as estimated by Todd Ablowitz, a consultant to electronic payments.

Phone company side, Orange France Telecom SA and Deutsche Telekom AG of Germany are rolling out NFC.

In the United States, three of the four largest wireless carriers: Verizon Wireless, AT&T Inc. and T-Mobile USA, have formed a joint venture, ISIS, to roll out payment services in limited regions of the country in the next year.

It is not clear that payment services will attract consumers NFC mobile phones, since using a mobile phone on a card, Save a few seconds.

Rajeev Chand, head of research at investment bank Rutberg & co., ticketing will be considered "entry point" for NFC, as speed is more important when you pass through the turnstiles.

In stores, NFC phones could be more popular if they replace only a portfolio of credit and debit cards. They could help marketers track and reward loyal customers, replacing both printed coupon and loyalty cards.

On the side of NFC payments, well, just going to go so far, in the opinion of the Netherlands. It will take time for terminals and cash isn't going away anytime soon.

"You're still going to have to bring your portfolio for the next 20 years," said the analyst.