Prakash Sambandam of FIME India speaks to Dilin Anand of Electronics For You about cards, near field communication (NFC) and the challenges faced in India.
Please tell us about your operations in India.
FIME India operates from Bengaluru and services Bangladesh, Sri Lanka, Nepal and Bhutan. Its primary function is the development of R&D functional test tools for smart card products to certify their compliance to industry standards. FIME India also provides test laboratory services to banks, governments, and card and terminal vendors. All test solutions are custom made for the necessary functionality and security requirements. As the market grows, we aim to expand and introduce physical testing, such as testing of the durability of smart cards and passports.
How big is the market for chip card technology in India?
The smart card sector in India is constantly growing, with many projects related to the universal integrated circuit card or the next-generation SIM card. NFC and contactless is an area of increased interest here. The majority of these projects come from government initiatives like e-passports, eidentity cards and e-licences for drivers, public distribution system, National Rural Employment Guarantee Scheme, as well as the private sector, in particular for the development of banking applications. The Reserve Bank of India (RBI) has recently mandated banks to move to EMV—a global standard for credit and debit payment cards based on chip card technology. The resulting migration to chip and personal identifi cation number (PIN) may include the use of contactless and mobile payments. These advancements are rapidly progressing, requiring the local stakeholders to respond quickly to new concepts and processes. Aligning to industry standards and validating products are the keys to providing market assurances and inspiring confi dence. FIME can assist stakeholders in resolving security and interoperability issues related to EMV migration and deployment.
What are the challenges in migrating to EMV?
India does not have a high rate of card fraud. Therefore the migration to EMV was not seen as a priority. Implementing EMV requires a lot of upgrades to existing infrastructure, for example, back-end systems and point-of-sale terminals. The changes required are both costly and time consuming, making it diffi cult to justify the investments needed against the low rate of card fraud in India. Now that the rest of the world is moving or has already made the move to EMV, India is becoming increasingly vulnerable to card fraud. So it is only natural that RBI migrates to EMV in order to create a more secure payment landscape in India.
Who do you cooperate with when testing contactless cards?
FIME works with payment systems such as MasterCard, Visa, American Express and JCB as well as technical standardisation bodies such as GlobalPlatform and EMVCo. Working with these ensures that FIME’s test tools are certified and qualified to test contactless cards and terminals to industry-recognised standards. What are the challenges in implementing NFC in India? How do you tackle them? The primary challenge in implementing NFC in India is interoperability and getting the different industry players to work together. Mobile service providers, transport operators and banking systems need to converge their efforts regardless of their different business objectives, for example. To achieve an interoperable and sustainable contactless and NFC ecosystem, a market must be stable and based on proven and trusted standards. At FIME, we support customers from all sectors involved throughout the research and design lifecycle. We test their interfaces to ensure that their systems will successfully interact in terms of functionality and security when launched into the market. What are the different security technologies used in the payment industry? There are different technologies but EMVCo is the de facto standard. EMVCo is the EMV standards body collectively owned by American Express, JCB, MasterCard and Visa. Several of FIME’s test tools for both contact and contactless smart cards and terminals have received EMVCo certification, which helps to enhance global interoperability of our clients’ smart card products. What makes NFC more secure? First, NFC transactions are low-value payment transactions. So it is a security risk that the banks are willing to take for the sake of convenience. For example, today, you cannot make a 10,000-rupees NFC payment. You would only be able to pay for tokens, parking and similar small things.
Second, there have been several pilot schemes and trials from which a lot has been learnt. So the technology is now more mature and secure. It is important to recognise that nothing is 100 per cent secure, 100 per cent of the time, and security provision should always aim to be one step ahead of the hackers. Even when a technology such as NFC is deployed, it is important that security measures continue to be assessed and security elements are added wherever necessary to protect customers. To achieve this, during the R&D stage technology developers should engage with testing and evaluation consultancies such as FIME. This will ensure from the start that solutions align to the latest requirements, saving significant time and money.
Do you consider NFC to be a disruptive technology?
I personally believe that NFC will not replace cards completely just yet. India consists of more cash-happy people and we are only just getting comfortable with cards. It is important to first establish NFC as a secure technology before it is adopted by consumers in India. Contact cards will continue to exist in India for a while alongside newer technologies such as NFC and contactless cards.
What is the technical challenge in testing NFC technology?
One challenge faced is handset reception. The antenna
on an NFC-enabled handset can impact the NFC connection.
This is a challenge for handset developers as the antenna
on a conventional reader is different from that on a mobile
Given the size of the handset and the communication
that takes place between the phone and its mobile network,
specific radio frequency (RF) experience is required
to implement NFC capabilities within a handset. This is a
challenge for mobile handset manufacturers, who are often
newcomers to the contactless market and need to design
specific RF antennas for NFC mobile devices.
There has been a case where we had to tell the handset
manufacturer that their antenna was positioned the wrong
way. The only way to overcome challenges like this is rigorous
testing of handsets from the beginning and throughout
the development process.