Verizon Wireless plans to enable the NFC market with Isis, but could kill it

Verizon Wireless, part of the Isis joint venture have been speaking about their plans to enable the NFC market today at the MobileBeat 2011 conference.

Today, Verizon Wireless spoke about its plans on enabling the NFC market with the use of its keychain SIM implementation of a secure element at the MobileBeat 2011 conference in San Francisco. The mobile operator, who is part of the Isis joint venture, plans to deploy development tools for developers, startups and other companies according to Humphrey Chen, Executive Director of New Technology Development for Verizon Wireless. The Isis joint venture is the multi-carrier collaboration between Verizon Wireless, AT&T Mobility and T-Mobile that aims to deploy their own platform for their customers to use NFC technologies.

Verizon Wireless to enable the NFC market with its secure element SIM which is limited to 8 keys in a “keychain”

A secure element is an area of memory that is separated from your phone’s operating system and is built to contain sensitive data that can authenticate mobile payments. Secure elements are normally tamper proof, which means if a thief or hacker attempted to extract data in an unauthorized manner, the card would permanently locks itself off and permanently deny all access requests for data.

Verizon Wireless is enabling the NFC market with a SIM based secure element that has 256KB of memory. This translates in real world terms as enough space for 8 authentication keys, or payment services. Humphrey Chen told delegates that 2 of the 8 keys were already provisioned for Isis uses, which leaves 6 free for developers and mobile transaction providers to utilize.

“Think of the mobile phone as having 10 keys in a keychain,” said Humphrey Chen.

The only problem with this approach is that consumers are expected to have many mobile wallets and transaction apps on their phone as the market matures. If you use Verizon’s secure element, you will be limited to 8 apps which may not be sufficient as many retailers are projected to have their own NFC payment apps. A way around this may come by adding extra secure elements to a phone by either buying an NFC phone that has its own secure element, or adding an NFC microSD card. If Apple does not include NFC in its iPhone 5, however, this will not be an option for Apple users.What we would like to know is whether or not Verizon intends to allow NFC payment apps to work over its network that do not use its secure element SIM?

As we mentioned previously, there is 256KB of memory in Verizon’s secure element. Verizon has apportioned 128KB for use by Isis and will rent the rest of the memory space, which it has divided into 8 separate authentication keys, to mobile app developers. This is where warning signs sound in our ears and we need to hear more about how Verizon Wireless intends to treat in-phone secure elements, and whether it intends to charge other services and products for using NFC over its network. Isis stated that they wanted to work with Google in regards to supporting its Google Wallet within what Isis is doing. It becomes hard to understand how this can happen when Google’s mantra is based on open source and freely available service.

Verizon Wireless is building its NFC AccessID platform

Humphrey Chen also shared with delegates to the MobileBeat 2011 conference that Verizon was hard at work building its AccessID system which it said will support business-to-consumer and business-to-business solutions that run on its network. We need to learn more about AccessID, and whether it is just the technology side of enabling NFC or whether Verizon intends to vet and limit applications and transactions that can run on its network. If it is the latter, we have huge reservations about how this impacts consumers and developers. Security and a form of authenticating and certifying apps is great, however, creating a closed market controlled by a mobile network carrier with regards to consumer transactions and finances is questionable at best. When Isis first announced its existence and its plans to operate a closed market where it controlled everything on their networks, it went down like a lead balloon. We at NFC Rumors hope that AccessID is not a return to this mandate.

“We’re identifying scenarios that are focused on end-user value and business value,” said Chen. Our only question is whose business?

Verizon Wireless is focused on making NFC simple for the masses

One of the main features of NFC is how frictionless it allows interactions to happen in our mobile devices. No booting apps, no typing in web addresses. Simply wave your phone over a passive or active NFC tag and off you go. This concept has not been lost on Verizon Wireless, who have said that they are working on ensuring that the consumer experience is easy.

“We are not the masses, and we have to make it simple for the masses,” Chen said.

Verizon Wireless may intend to enable the NFC market and has today shared some of its plans to do so; but from where we are sitting, we end up with more questions than answers. No doubt answers to Verizon’s NFC ambitions will come in good time and we will let you know what it means when it does.