Concerned over what amounts to milliseconds, London Underground operators say Near Field Communication-enabled smartphones don’t complete transactions fast enough for its commuters going through ticket turnstiles.

Testing at a reported speed of 500 milliseconds per transaction, the NFC chips in mobile phones can’t match the 300 milliseconds clocked for the transit agency’s prepaid Oyster card’s radio frequency identification chip London’s commuters use.

Transport for London officials have expressed the concern for several months, but an executive informed the growing number of commuters with NFC-enabled phones in July 11 interviews with British press that the transit system’s terminals won’t be accepting NFC payments anytime soon.

The transportation system requires any technology powering the ticket-transaction process to operate at less than 500 milliseconds, Shashi Verma, customer experience director for Transport for London, stated in published interviews.

The company’s concerns center on NFC technology in smartphones, not other EMV smart cards commuters may use, Verma noted. “We are keen to see any progress the industry can make in this [NFC] area,” he added.

That progress eventually may come, but speed versus security likely will be a determining issue.

Though technology developers generally consider NFC a more secure extension of RFID cards, the additional security likely causes the ever-so-slightly longer transaction process than using an Oyster card, says David Kaminsky, analyst for emerging payments with Mercator Advisory Group.

“One aspect of NFC that makes it more secure is its capability to incorporate [software testing] dynamic verification numbers,” Kaminsky notes. “If they were testing dynamic NFC in the London Underground, and their RFID Oyster cards are static, that would explain the difference in transaction time.”

NFC has limited bandwidth, and transmitting the dynamic information consumes a significant amount of bandwidth, he adds.

The location of the secure-element chip in an NFC phone also affects transaction speed, Kaminsky contends. In phones in which the secure element is located on a SIM card, instead of on the phone itself, the element is farther away from the antennae, which increases the time required for a transaction, he explains.

The ticket-transaction processing issue for the Transport of London has a few layers to it, not the least of which is the country’s modification of general card-payment transaction rules as they apply to transportation companies, says Zil Bareisis, a London-based senior analyst for research firm Celent.

The general rules required the use of card counters to manage risk and occasionally accept chip and PIN, Bareisis notes. “This would have serious implications on the transaction speed, plus it would require Transport of London to install PIN pads on transit infrastructure,” he adds.

Instead, the agreed new rules for transport in the UK state that the “operator manages risks to provide equivalent protection within the 500-milliseconds time limit through offline data authentication, deny lists in terminals, and online authorizations from the back-office,” Bareisis says.

As such, most NFC developers would argue that the technology is able to achieve the 500ms standard today, Bareisis says.

In addition, many of the views Verma expressed to the media stem from a presentation he made at the Open Mobile Summit in London in late May, Bareisis notes.

“He admitted the Transport of London hasn’t tested the system since 2010, but he was taking a contrarian view to try to spur the industry into action,” Bareisis says.

For his part, Verma has indicated he is a strong supporter of NFC in payments but that it does not work for Transport of London.

Still, the transportation system has to determine whether NFC, even if proven to be fast enough, should be incorporated into the transit terminals, Bareisis contends.

“Given the still relatively small number of NFC phones available in the market, with Apple being a major absentee and banks still dragging their feet to even issue contactless cards, there is a risk that getting rid of Oyster today would leave a lot of people not being able to use the system,” he adds.

The Oyster card may have its own “side issues” that transit executives don’t always bring up, says Gareth Lodge, also a London-based industry analyst with Celent.

Transit officials originally viewed the Oyster card as eventually becoming an open-loop payment card, similar to the Octopus card in Hong Kong, Lodge says.

When banks offered business scenarios that weren’t attractive to the transit system, the Oyster card remained strictly a prepaid card for London transit use, he notes.

“The Oyster card may be faster than NFC, but the transit system’s earlier commitment to move it to a bank card might suggest that the costs of running the Oyster scheme are not insignificant,” Lodge contends.

Transport of London has to at least establish a way for the Oyster card to operate in areas outside of London, Lodge suggests. “A significant number of Oyster cardholders almost certainly had to buy a paper-based ticket before getting to a point [in London] where they could start using their Oyster card at all,” he says.

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