You are thinking of picking up groceries on your way home after work when you see a poster advertising rice, cooking oil and other staples. So you whip out your mobile and hold it near the poster to make the order, which can then be delivered right to your doorstep. That is no ordinary poster, but a Near Field Communication (NFC) virtual store, which allows consumers to buy things simply by putting their smartphones near a sensor.

If this sounds terribly futuristic, the good news is, the future will be upon us by the middle of next year. The infocomm Development Authority of Singapore (IDA) announced on 25 October 2011 that it had awarded a Call-for-Collaboration (CFC) for industry players to deploy an interoperable NFC infrastructure. It went to a consortium led by digital security provider Gemalto.

At the media briefing on the winning NFC consortium (from left): Ms Chan Yim Leng (SingTel), Mr Nicholas Lee (EZ-Link), Mr Tan Teck Lee (Gemalto), Mr Tan Eng Pheng (IDA Singapore), RADM(NS) Ronnie Tay (IDA Singapore), Mr Sim S Lim (DBS Singapore), Ms Yeong Mun Ling (StarHub), Mr Anil Wadhwani (Citibank Singapore), and Mr P Subramaniam (M1).

The seven companies are mobile network operators SingTel, M1 and StarHub, payment service providers Citibank, DBS and EZ-Link, with Gemalto developing and operating the Trusted Third Party (TTP) infrastructure. The TTP serves as a single, secure point of contact between service providers and mobile operators. This creates a secured access point that allows any mobile service provider to connect with any service provider that chooses to utilise NFC technology for secure mobile transactions.

The consortium and IDA will invest S$40 million to develop the interoperable and scalable NFC infrastructure, which will be among the first in the world to be deployed on a national level. The infrastructure is part of IDA’s Next Generation e-Payment Programme, and NFC services will be rolled out progressively across all three of Singapore’s mobile operators from mid-2012.

IDA and the consortium will also be working with the Land Transport Authority to assess NFC mobile readiness for transit by early 2013.

A whole new shopping experience awaits at an NFC virtual store.

“The TTP infrastructure will enable prospective service providers to reach out to all mobile subscribers in Singapore. Such ubiquitous access will spur the growth and adoption of innovative NFC mobile services, and in turn transform Singapore’s payment landscape,” said RADM(NS) Ronnie Tay, Chief Executive Officer of IDA.

Trials of handphone payments have been carried out in the past, but users were required to key in information such as their 16-digit credit card numbers, which made the process cumbersome. The evolution of technology and the advent of smartphones, however, have streamlined the process, and users today can just tap and go.

In an NFC ecosystem, consumers can use their NFC-enabled smartphones as electronic wallets, shopping and paying for taxi rides using their mobiles. They can download coupons, redeem loyalty rewards and even buy cinema tickets remotely by leveraging on the Internet – the beauty of the system is that it draws on a combination of the capability of both the NFC and the Internet-enabled smartphone.

It is an exciting prospect. Consumers without NFC phones need only purchase bridging devices from their mobile operators for their existing handsets, and then download an app.  In the event that a consumer loses his handset, a simple call to the bank will be enough to terminate the app remotely.

At the other end of the transaction, any merchants with contactless credit card or CEPAS terminals can already accept payment via NFC phones. They can also rely on the infrastructure to create loyalty schemes. Incorporating NFC at various customer touch points will enable merchants to integrate customers’ profiles and preferences with actual transactions made, thereby improving target marketing effectiveness and overall customer relationship management.