SanDisk, Philips join forces on cell phone payment

Peter Clarke
EE Times
(05/04/2006 6:52 AM EDT)

LONDON — Flash memory card supplier SanDisk Corp. has struck a deal with Philips Semiconductors to embed the Philips SmartMX smartcard controller chip in certain types of flash memory cards to allow them to be used for near-field communications (NFC) and in particular, when the cards are inserted in mobile phones, to pay for things.
SanDisk (Sunnyvale, Calif.) said the SmartMX would be embedded in TrustedFlash cards allowing consumers to use their phones as bus or train tickets and perform secure “contactless” payments and other contactless transactions by simply waving their phones near a contactless reader in a mass transit turnstile, checkout counters or drive-through windows.

TrustedFlash cards with SmartMX technology for NFC transactions are available to OEM customers in the microSD card format. SanDisk has started pilot programs and expects broader commercial rollout in 2007. The company did not state where the pilot programs are being run.

Philips (Eindhoven, The Netherlands) has been promoting NFC communications for payment by cell phone for many years. The original idea was that micro-payments enabled by cell phone could be billed in the same way as cell phone usage was billed. Philips joined forces with Nokia on NFC-enabled phone in November 2004 and the two companies announced a pilot program with Rhein-Main Verkehrsverbung, the public transport authority for Frankfurt, Germany, to use NFC-capable mobile handsets in a travel payment trial.

By embedding credit in the TrustedFlash cards, which would be purchased in the retail aftermarket, SanDisk argued that it would relieve handset manufacturers and service providers of the burden of performing security certification.

It could also, theoretically, allow SanDisk to extract a little bit of the value of each transaction, and if contactless payment ever became commonplace could be give SanDisk a position of far-reaching financial power.

“Today, consumers purchase SanDisk flash cards to expand their mobile phone storage capabilities for pictures, music and videos, and, thanks to TrustedFlash technology, they can enjoy premium content such as music and movies. Tomorrow, they will also use TrustedFlash cards with SmartMX technology to expand the phone’s security capabilities and host a variety of NFC applications to purchase tickets, buy a cup of coffee and make other small purchases,” said Farshid Sabet, Senior Director of Mobile Content and Security Solutions at SanDisk, in a statement.

“Security of transactions conducted using NFC is paramount to consumer acceptance and market adoption of this easy-to-use technology,” said David Holmes, NFC business development manager at Philips, in the same statement.