During AIX, we had a long talk with Geoff and Claire Underwood of IFPL and traced out the tech steps and reasoning around NFC – Near Field Communication. When we got back, IFExpress reviewed a couple of articles that talked about the need for passenger identification on aircraft and realized that the passenger manifests are not the best passenger data device. The IFPL team noted that most people think of NFC as a payment device. Let’s face it, digitizing passenger data and having it available on the aircraft is probably one of the last parts of the airline network to be automated. While that is a true statement and someday, airlines will rely on some on-plane identification for things like security, passenger ID, sales, preference settings, etc., it certainly isn’t here yet. Geoff knows that and gave IFExpress an earful about the future of this technology. “Preferences” in the article we read were a reference too automatically set lighting, music, drinks, food… whatever. “But” Geoff noted, “NFC is a 2-way communication device, not just a credit card.” Good point. Certainly, upper classes need this to eventually keep those high value customers and provide 2 way communication with the airline. The concept of QR codes interfaces with passengers seems a little bit outdated with NFC around! And that is the problem, it is not around on many planes and an interface with passenger databases is a future need. NFC can open channels of service like Wi-Fi, IFE content, music streaming, GSM calls… there is no end to solutions once the infrastructure is in place. And that is the issue, the infrastructure. Lower in weight than crews, credit card readers, and who knows what, the light NFC sensors and circuitry in conjunction with a PIN number can open up a world of passenger spending and service… especially with a connection to the ground. A flier could put money on an iPhone or card (or whatever) from the ground for on-board purchases or eventual airborne or ground fulfillment. Today you can use the NFC only on a few seatbacks but someone has to integrate technology into the IFE based, passenger preference driven, iPhone supported, seatback installed and powered, electronic receipt dispensing, consumer interface system. Geoff and their IFE team is ready to talk your language. Geoff.Underwood@IFPL.com Call him about your passenger preference problem and see if NFC can help. Oh, and one last thing, NFC is supposed to be standard on all credit/debit cards starting in 2014!

Rockwell-Collins now offers three PAVES product lines: PAVES Broadcast (overhead), PAVES On Demand, and PAVES Wireless. The company has also begun the third generation of the product line. RC has selected Kontron servers and WAPS for the wireless version but is still working the software side of the mix. And speaking of software, while PAVES Wireless hardware clients and servers are owned by the airline, they also own the client software. This is significant because the software has to be constantly updated with programming and updates to talk with passenger PEDS. An aircraft that has to talk too 30 or 40 devices will need a lot of support and software updates each month. As Rockwell observed, “This is going to change the game because the business model will have to include software updates.” In fact, multiple, ongoing software updates with PED interfaces included will be the new business model. RC notes that traditional IFE may need a new model and the perception of getting into an inexpensive hardware solution may be supplanted by a new higher cost, software-based paradigm. Back to the hardware – Rockwell will be installing PAVES hardware on Thomas Cook in the May/June time-frame and the airline plans to launch PAVES in front of passengers in 2013.

The IFE Thought Of The Day – When will someone invent a drop-down overhead video display with built-in audio for regional jets so they can make money selling infomercials on short haul flights? For that matter, couldn’t the content exist resident in the PSU device (toggled on by the purser) and not on a server? And perhaps, audio might not be needed at all with clever images and graphics – what’s wrong with a moving billboard? Why couldn’t you send the audio via Wi-Fi to your smart device?

And Now For Something Completely Different… and Expensive!

One of the articles we wanted to do for sometime now is the definition of ancillary revenues that lie under airlines balance sheets of most carriers today. Ostensibly because of higher fuel costs, the airlines began a “pay-for-play” approach to incremental goods and services introduced around 2007 by Ryanair’s, CEO, Michael O’Leary (and others). And boy, has this concept caught on! Admittedly, paying higher ticket prices is the option but airline management has opted to charge, often for options, incrementally. Here are just a few: First Shipped Bag – Free to $100 – second and third bag up to $150; Pet Shipping – up to $200+; One Carry On Bag – up to $100 extra; Reservation Change – up to an extra $200, Pillow/Blanket – up to $10; Drinks – (alcohol & non-alcohol) another 10 bucks; Inflight Entertainment – free to $10; and Wi-Fi – up to $14. We won’t talk about GSM phone bill increases for talk and texting but they will show up on your card later. What’s next – Pay for Power? You just can’t blame the airlines for covering fuel increases because, in this case fliers do have options, up to a point. It is just that the ‘nickel and dime-ing’ is a term heard on almost every flight and it will not get better because prices do go up. No doubt, the future is bright (or dim depending on your view) for higher ticket prices as well.

Also, here are a few web links that you might not have seen and will find interesting:

Have your say in Teague’s ‘Take Travel Back’ campaign

Inside Alaska Airlines’ new Boeing Sky Interior – GeekWire

05-2013 : Time to hire a mobile strategist

New luggage blocks ID theft on the road

12 in-flight innovations to keep an eye out for | CNN Travel

As far as technology goes, NFC doesn’t, and this is precisely why it might be a great technology to watch for future inflight payment applications. But, lets start in the beginning.

For a definition of Near Field Communications we first turn to Wikipedia:
“Near field communication, or NFC, allows for simplified transactions, data exchange, and wireless connections between two devices in close proximity to each other, usually by no more than a few centimeters. It is expected to become a widely used system for making payments by Smartphone in the United States. Many Smartphones currently on the market already contain embedded NFC chips that can send encrypted data a short distance (“near field”) to a reader located, for instance, next to a retail cash register. Shoppers who have their credit card information stored in their NFC Smartphones can pay for purchases by waving their Smartphones near or tapping them on the reader, rather than using the actual credit card.”

Having established a definition, let’s now look at some applications that are out there today. Here is a short list of NFC uses that you probably already know and love, and most assuredly, will grow: Mobile payments via PIN, PayPal, Google Wallet, Air (rail and ground too) ticketing, Boarding passes, Retail Point Of Sale (POS) and so on. But what is it exactly? We again turn to Wikipedia: “NFC is a set of short-range wireless technologies, typically requiring a distance of 4 cm or less. NFC operates at 13.56 MHz on ISO/IEC 18000-3 air interface and at rates ranging from 106 kbit/s to 424 kbit/s. NFC always involves an initiator and a target; the initiator actively generates an RF field that can power a passive target. This enables NFC targets to take very simple form factors such as tags, stickers, key fobs, or cards that do not require batteries. NFC peer-to-peer communication is of course possible, where both devices are powered.” We also note that has a max data transfer rate of 424 Kbits/sec and a working distance of 20 cm, or less. Being a technology with short range, minimizes the unwanted interception, a feature that has merit on an airplane. After seeing the IFPL NFC demonstrator at the last APEX meeting in Seattle, we asked IFPL’s Geoff Underwood about his interest in the technology.

Said Underwood, “IFPL has worked with contact-less technology for many years.  We have experience with the hardware and packaging and certifying it for use on-board aircraft.  This experience puts us in a market leading position for further developing this technology for use on aircraft. As Near Field Communication technology develops further, the possibilities for airlines to capture ancillary revenue increases, as NFC facilitates “easy purchasing”; no need for cash.  IFPL’s latest developments tackle the issue of making secure payments on board, through a combined NFC & chip and pin reader to increase the passenger’s payment options. Currently there is an NFC limit of around £15 per transaction using an embedded credit card.  When financial services institutions increase the payment limit, it will enable higher value transactions to be made on-board which will continue to be both secure and quick. The security eventually being embedded in the passenger’s mobile phone.”

Q: Why is this technology prevalent in Europe?
“In Europe and the Far East as well as Canada Chip-and-Pin technology has gained wide acceptance due to the secure nature of the payment, offering financial safety for both the user and the credit card companies.  NFC Technology is now available to allow people to make larger payments both to credit card companies and person-to-person with the same security, as credit card companies are on the verge of agreeing standardized security protocols.”

“Users will be able to manage all their payments through their Smartphone; this has led to the now familiar term ‘mobile wallet’ which opens up the option for airlines to increase their revenue streams through easy payment for on-board sales. For low cost carriers this could be used for pay as you go IFE, drinks and so on during a flight. Contact-less devices are the way many passengers will in future choose to pay for items instead of having to find cash and airlines will be able to build in the system without having to have a card swipe.  IFPL has developed a system which tackles the issue of making secure payments on board. The system includes an option for a chip and pin reader to increase the available payment methods. In America where credit card chip & pin has not gained traction, it is anticipated this market is more likely to bypass chip & pin and go straight to NFC.” 

Q.   What all is involved in the hardware?
“Payment systems are centered around a controller that communicates with the host IFE system over USB.  For a contact-less installation a short-range flat antenna is needed to establish the link to the passenger’s device, be that an NFC enabled credit card or “Mobile wallet”. A Chip-and-Pin payment system requires that all components of the payment sub-system are maintained secure at all times, even when un-powered.  Thus the reader, antenna and controller modules all have additional physical features that prevent loss of the passenger’s personal information. The range of the contact-less signal is considerably smaller (typically 1” – 2”) than other more familiar wireless connections which lends itself to a more secure passenger connection. We see NFC as the “next big thing” allowing a passenger’s phone the ability to, be a boarding card, pay for on-board extras, log the passenger into the on-board system etc.  NFC can be more secure than the current chip & pin system.  We see this technology gaining real momentum in a very short time frame. Said Underwood; “Embedded NFC has no moving parts and will give amore long term reliability than card swipe or chip ‘n pin.”

Q: What devices can work and what will they need in the way of software?
“The number of devices that can use this technology are increasing all the time.  In the UK one of the main smart phones is the Samsung GTS5230N; however, currently there are over twenty phone types available that are NFC enabled.  In the US the options are more limited; however there are big companies like Google (Google Wallet) who are trying to ensure the jump from Mag Strips to NFC will happen in the near term. Contact-less payment is quick and easy, just “tap ‘n go”!  After the purchase the receipts will be organized in the phone – no need for a wallet full of receipts!”

Q. What all is entailed in using the system?
“All the passenger needs to do is select the product(s) they want and choose their payment method.  To use their NFC enabled smart phone, it’s very simple – click pay, “tap ‘n go” the phone and the transaction is complete. The user can enable a code to be entered on their phone first to increase their security.”

Neil Thomas, IFPL’s Business Development Manager, says that passengers will benefit as, “Contact-less technology allows easy connections, quick transactions, and simple data sharing”.

Q:  How is the back office/data network implemented and what options are available there?
“Although this is part of the NFC process, it would not be covered by us. Our understanding is that right now there will be a secure information store which will store all the transactions until the aircraft reaches its destination. In future as more aircraft are fitted with communication systems to the ground, payment validation could become real-time using those links. Currently payment information is being stored on board aircraft while in flight. This is generally done in two ways; 1) the hardware which is built within seat backs sends information to a secure server; 2) flight attendants use card reading handsets which store all the information.” 

“Both options are only able to send the information further down the chain to the banks when the aircraft has arrived at its destination. This process incurs a percentage of risk as the airline will only be able to authenticate the information after the transaction has taken place, this is balanced by their customers generally spending small amounts and this is where NFC will fit perfectly offering the ability to make small simple payments with the minimal amount of hassle.”

Q:  What are IFPL NFC plans going forward?
“Currently while the NFC infrastructure is being developed by the financial institutions. Today the transaction value is low; however it has the potential for secure high value transactions. We are keen to work with partners to realize the full potential of our devices.”

IFPL’s NFC solution unlocks the potential NFC technology for the traveller.  For example a passenger will be able to use their phone to: Check-in and receive a digital “boarding card”, Store and utilize Frequent Flyer information, Store IFE preference data, Pay for movies, purchase food or drinks on-board, and in the wider environment,  NFC could control cabin lighting and be used for advertising.

Q: What is the cost of implementation?
Currently it is likely that NFC will be much cheaper to implement than chip & pin whilst at the same time being as secure. We see this time as an opportunity for the IFE industry to get engaged early and help shape their requirements.

Q: What are the difference between various approaches for NFC designs/systems?
“The design of a contact-less payment point depends on the size of the antenna which receives the payment information. This means that receivers can be placed in obvious positions such as seat backs or hidden within armrests or screens. Currently the NFC payment stakeholders are working to define a standard format that all banks and mobile phone providers can adhere to. The scenario that needs to be avoided is more than one closed, incompatible architecture. We look forward to working with you, for more information on NFC, please contact us.” You can reach Geoff at geoff.underwood@ifpl.com or call them on their new telephone number – 44 1983 555900.

To dig a bit deeper follow this link.

As an added note, we would point out that Geoff has a penchant for charity work in Africa dealing with, and upgrading, the school system. If you would like to help him, check out virginmoneygiving.com.