ADVANCED TOPIC OF INFORMATION SYSTEM

NEAR FIELD COMMUNICATION (NFC) TECHNOLOGY IN

INDONESIA

Sukma Annisa Sekar Putri

1701327422
Binus University
Jakarta
2016
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Abstract
In modern times, the development of the technology in Indonesia payment system that
allows us to perform payment transactions, both from transport up to online shopping
payment. we can feel this development with their presence by using RFID smart card as emoney that we can use to pay for the transportation of Transjakarta, trains, and also to pay a
toll with just a Tap without the need to enter a pin or swiped. in addition to smart cards, NFC
technology also has begun to develop its use in Indonesian society as a payment on the phone
though not maximum utilization. NFC technology in mobile phones is expected to not only
be used for payments in the minimarket, cinema and restaurant but can also be used for
transportation as well. There is a lot of challenge to implement NFC technology in Indonesia,
such as people who still not aware of it, and Indonesian government agreement about the use
of NFC.
Keyword - RFID, Smart Card, Near Field Communication (NFC), Payment System,
Mobile Phone

Table of Contents
ADVANCED TOPIC OF INFORMATION SYSTEM..............................................................1
NEAR FIELD COMMUNICATION (NFC) TECHNOLOGY IN INDONESIA.....................1
Abstract......................................................................................................................................2
CHAPTER 1..............................................................................................................................4
INTRODUCTION.....................................................................................................................4
1.1
1.2
1.3
1.4

Background..........................................................................................................................4
Scope....................................................................................................................................5
Objective..............................................................................................................................5
Methodology........................................................................................................................5

CHAPTER II..............................................................................................................................6
THEORITICAL FRAMEWORK..............................................................................................6
2.1
Radio Frequency Identification (RFID)................................................................................6
2.1.1 RFID System....................................................................................................................7
2.2
Near Field Communication (NFC).....................................................................................10
2.2.1 Smart NFC Devices........................................................................................................11
2.2.2 NFC Security.................................................................................................................12
2.2.3 Usability in NFC............................................................................................................13
2.3
Smart Card.........................................................................................................................14
2.3.1 Types of Smart Cards: Capability Based Classification.................................................15
2.3.2 Types of Smart Cards: Mechanism Based Classification...............................................15

CHAPTER III..........................................................................................................................19
RESULT AND DISCUSSION.................................................................................................19
CHAPTER VI..........................................................................................................................20
CONCLUSION AND RECOMMENDATION.......................................................................20
4.1
4.2

Conclusion.........................................................................................................................20
Recommendation................................................................................................................20

CHAPTER 1
INTRODUCTION
1.1 Background
The rapid development of payment systems technology, in Indonesia, ranging
from smart card technology, such as Flazz card, e-money up to, t-cash are lately being
widely used by the public. the magnitude of technological developments in the payment
system shows that, the importance of ease in conducting transactions without money for
the people of Indonesia.
Smart card technology, such as Flazz cards and e-money which is already widely
used by many people, is one of the main forms of RFID technology that allows us to
conduct financial transactions quickly without the need to enter a pin first, or simply tap
it to the device called the reader. But by keeping pace with the times, the existence of
Flazz and e-money is start to being replaced by the presence of T-Cash. t-cash is a
payment system using NFC technology Tag issued by Telkomsel. using t-cash, users can
perform a variety of payment transactions and purchases, simply by using their mobile
phone.
The use of Near Field Communication, or NFC in Indonesia actually been
developed from the year 2011, only the new utilization widely used since their t-cash in
2014 ago. NFC technology is the development of RFID or Radio Frequency
Identification which uses radio waves to transmit signals between devices. NFC
technology allows for the exchange and delivery of data instantaneously; within which it
can also be used to conduct financial transactions like ATM only without the need to use
a credit or debit card.
Now, with the NFC technology in a mobile phone into an additional value of its
own. in some Asian countries, such as south korea, smart card and NFC technology is
already commercialized and successfully implemented to the community as a daily
means of payment. in south korea, almost all people are required to have a T-money is a
kind of e-money which they can use to pay bus and subway, as if to pay using T-money
is cheaper than using cash. in addition to successfully implement a smart card, south
korea also successfully implementing NFC technology by using samsung pay, where pay
samsung This allows you to put the debit and credit cards that you have added to your
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phone. but the question is whether Indonesia is able to implement smart card and NFC
technology to its full potential as one of the main payment instruments? in this paper I
will try to discuss the challenges faced in implementing NFC in Indonesia.
1.2 Scope
To undertake the preparation of this writing, it will be explained about the scope of
Near Field Communication (NFC) Technology in Indonesia:
1. The definition of Near Field Communication (NFC)
2. Example of NFC implementation
3. The challenges of implementation NFC in Indonesia
1.3 Objective
The Objection of writing this paper is:
1. Reader can understand what is Near Field Communication (NFC)
2. Increased reader knowledge about NFC
3. Readers know what the use of NFC technology in everyday activities
The Purpose of writing this paper is:
1. The reader knows potential of NFC technology
2. The reader knows how to use NFC in real life more properly
3. More vendor develops payment system using NFC technology

1.4 Methodology
Preliminary Studies
Preliminary studies were conducted at the beginning of the writing of this paper to get
information about Near Field Communication (NFC), such as the definition of NFC, and
examples of its implementation in everyday transaction. It is also to explain the reasons
behind the making of this paper.
Literature Review
Collect all the information that related to Near Field Communication (NFC), RFID,
and other information related to it, from various resources, such as books, journals, eJournals, article, scientific article, and others trusted resources from internal or external
resources.

CHAPTER II
THEORITICAL FRAMEWORK
2.1 Radio Frequency Identification (RFID)
RFID is a communication technology to exchange data between an RFID reader and
an electronic RFID tag (label) by using radio waves (see Figure 0-1). These tags are
traditionally attached to an object, mostly for the purpose of identification and tracking. The
data transmission results from electromagnetic waves, which can have different ranges
depending on the frequency and the magnetic field. RFID readers can read/write data from/to
RFID tags.

Figure 0-1. Architecture of a RFID Systems

The connection between RFID readers and the RFID host application uses wired or
wireless networks. In the backend system, the RFID application is assigned specific
information. RFID tags generally contain an integrated circuit (IC) and an antenna. The IC
provides data storage and processing, modulating and demodulating an RF signal, and other
functions. The antenna enables the signal to be received and transmitted. Tags, readers and
transmission details about the RFID systems components are explained later in this section.

The IFF (Identify Friend or Foe) system was the first common use of RFID
technology in the Second World War used to distinguish friendly aircraft from foe.
Commercial usage of RFID technology dates back to 1960s and 1970s with door key opening
systems. Technology advances in a variety of different fields (e.g., computers, radio, radar,
supply chain management, transportation, quality management, and engineering) have made
RFID technology more useful with applications in asset management, payments, ticketing,
livestock tracking, and transportation.
(Coskun, Ok, & Ozdenizei, 2012)
2.1.1

RFID System

RFID systems are closely related to the smart cards. Like smart card systems, data is
stored on an electronic data-carrying device the transponder. However, unlike the smart
card, the power supply to the data-carrying device and the data exchange between the datacarrying device and the reader are achieved without the use of galvanic contacts, using
instead magnetic or electromagnetic fields. The underlying technical procedure is drawn from
the fields of radio and radar engineering. The abbreviation RFID stands for radio frequency
identification, i.e. information carried by radio waves. Due to the numerous advantages of
RFID systems compared with other identification systems, RFID systems are now beginning
to conquer new mass markets. One example is the use of contactless smart cards as tickets for
short-distance public transport.
Components of an RFID System

Figure 0-2. The reader and transponder are the main components of every RFID system

An RFID system is always made up of two components (Figure 0-2):

the transponder, which is located on the object to be identified;

the interrogator or reader, which, depending upon the design and the technology
used, may be a read or write/read device (in this book in accordance with normal
colloquial usage the data capture device is always referred to as the reader,
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regardless of whether it can only read data or is also capable of writing).

A reader typically contains a radio frequency module (transmitter and receiver), a
control unit and a coupling element to the transponder. In addition, many readers are fitted
with an additional interface (RS 232, RS 485, etc.) to enable them to forward the data
received to another system (PC, robot control system, etc.).
The transponder, which represents the actual data-carrying device of an RFID
system, normally consists of a coupling element and an electronic microchip. When the
transponder, which does not usually possess its own voltage supply (battery), is not within
the interrogation zone of a reader it is totally passive. The transponder is only activated
when it is within the interrogation zone of a reader. The power required to activate the
transponder is supplied to the transponder through the coupling unit (contactless), as are
the timing pulse and data. (Finkenzeller, 2010)
Operating Frequency
RFID systems that use frequencies between approximately 100 kHz and 30MHz
operate using inductive coupling. By contrast, microwave systems in the frequency range
2.455.8 GHz are coupled using electromagnetic fields.
Microwave systems have a significantly higher range than inductive systems,
typically 215 m. However, in contrast to inductive systems, microwave systems require
an additional backup battery. The transmission power of the reader is generally
insufficient to supply enough power for the operation of the transponder.
Another important factor is sensitivity to electromagnetic interference fields, such
as those generated by welding robots or strong electric motors. Inductive transponders are
at a significant disadvantage here. Microwave systems have therefore particularly
established themselves in the production lines and painting systems of the automotive
industry. Other factors are the high memory capacity (up to 32 Kbyte) and the high
temperature resistance (up to 250 C) of microwave systems. (Bachthaler, 1997)
Range
The required range of an application is dependent upon several factors:
the positional accuracy of the transponder;
the minimum distance between several transponders in practical operation;
the speed of the transponder in the interrogation zone of the reader.
For example, in contactless payment applications e.g. public transport tickets
the positioning speed is very low, since the transponder is guided to the reader by hand.

The minimum distance between several transponders in this case corresponds to the
distance between two passengers entering a vehicle. For such systems there is an optimal
range of 510 cm. A greater range would only give rise to problems in this case, since
several passengers tickets might be detected by the reader simultaneously. This would
make it impossible to allocate the ticket reliably to the correct passenger.
(Finkenzeller, 2010)
Security Requirements
Security requirements to be imposed on a planned RFID application, i.e.
encryption and authentication, should be assessed very precisely to rule out any nasty
surprises in the implementation phase. For this purpose, the incentive that the system
represents to a potential attacker as a means of procuring money or material goods by
manipulation should be evaluated. In order to be able to assess this attraction, we divide
applications into two groups:
industrial or closed applications;
public applications connected with money and material goods.
This can be illustrated on the basis of two contrasting application examples. Let us
once again consider an assembly line in the automotive industry as a typical example of
an industrial or closed application. Only authorized persons have access to this RFID
system, so the circle of potential attackers remains reasonably small. A malicious attack
on the system by the alteration or falsification of the data on a transponder could bring
about a critical malfunction in the operating sequence, but the attacker would not gain any
personal benefit. The probability of an attack can thus be set equal to zero, meaning that
even a cheap low-end system without security logic can be used.
Our second example is a ticketing system for use in public transport. Such a
system, primarily data carriers in the form of contactless smart cards, is accessible to
anyone. The circle of potential attackers is thus enormous. A successful attack on such a
system could represent large-scale financial damage to the public transport company in
question, for example in the event of the organized sale of falsified travel passes, to say
nothing of the damage to the companys image. (Finkenzeller, 2010)
Memory Capacity
The chip size of the data carrier and thus the price class is primarily
determined by its memory capacity. Therefore, permanently encoded read-only data
carriers are used in price-sensitive mass applications with a low local information

requirement. However, only the identity of an object can be defined using such a data
carrier. Further data is stored in the central database of the controlling computer. If data is
to be written back to the transponder, a transponder with EEPROM or RAM memory
technology is required.
EEPROM memories are primarily found in inductively coupled systems. Memory
capacities of 16 bytes to 8Kbytes are available. SRAM memory devices with a battery
backup, on the other hand, are predominantly used in microwave systems. The memory
capacities on offer range from 256 bytes to 64 Kbytes. (Finkenzeller, 2010)
2.2 Near Field Communication (NFC)
Near Field Communication (NFC) is a new technology and ecosystem that has
emerged in the last decade. NFC technology is a short range, high frequency, low
bandwidth and wireless communication technology between two NFC enabled devices.
Communication between NFC devices occurs at 13.56 MHz high frequency which was
originally used by Radio Frequency Identification (RFID). Although RFID is capable of
reception and transmission beyond a few meters, NFC is restricted to within very close
proximity. Currently, integration of NFC technology into mobile phones is considered as
the most practical solution because almost everyone carries one.
NFC technology enables communication between an NFC enabled mobile phone
at one end, and another NFC enabled mobile phone, an NFC reader or an NFC tag at the
other end. Potential NFC applications and services making use of NFC technology
include e-payment, e-ticketing, loyalty services, identification, access control, content
distribution, smart advertising, data/money transfer and social services. Due to its
applicability to a wide range of areas and the promising value added opportunities, it has
attracted many academicians, researchers, organizations, and commercial companies.
The changes or improvements on RFID to expose NFC technology can be
described as:

Short range communication, where RFID may use long range especially for active

tags that contain embedded energy.

Passive tag usage only (actually occurs only in reader/writer mode) whereas both

active and passive tags are possible in RFID.

Inherent secure data exchange because of short range communication.
Implicit matching of pairs that express their willingness to perform NFC
communication by bringing themselves close to each other.

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Interest from companies to integrate many services such as payment with debit
and credit cards, loyalty, identification, access control and so on, because of the
secure communication and implicit matching as described in the previous item

(Coskun, Ok, & Ozdenizei, 2012)

Three unique advantages of the NFC Mobile Phone will widen the opportunities for NFC
services:

Interactivity: The user interface functions of mobile phones - displays, keyboards,

touch screens, sounds and vibrations - enable NFC services to be interactive. For
example, applications can be provided that display purchase records on the screen. In
addition, the card emulation mode is used interactively. For example, a user can check
available applications and activate or deactivate an application dynamically through

the user interface of a mobile phone.

Remote Multi-Application Management: Multi-application use is supported by the
NFC mobile phones. While this may be supported by contact-Less cards as wed, the
addition of a mobile network enables application management functions, such as
dynamic provision to a trusted execution environment, assignment of trusted areas,
application download, personalization and locking/ unlocking. Management functions
can be executed remotely in real time, so that a user can start a new service
immediately following subscription, bringing new meaning to the term "anytimeanywhere". Additionally, a user can ask the service provider to stop NFC applications
when a device is lost or stolen. Users and service providers are thereby provided with

certain controls for managing security and risks associated with their NFC services.
Remote User Management: User management functions are enabled for users and
service providers by leveraging the "always on" communication of mobile networks.
For example, service providers, with users' consent, can retrieve NFC service usage
records and send users customized information during transactions or on other
occasions. In another example, users can access their personal data in real time and
can be more proactive about the information they would like to receive.
(Febriani, 2012)

2.2.1

Smart NFC Devices

NFC devices are the acting components of NFC. NFC is available using three NFC
devices: the NFC mobile, NFC reader and NFC tag.

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NFC enabled mobile phone: NFC enabled mobile phones which are also referred to as
NFC mobiles are the most important NFC devices. Currently, integration of NFC
technology with mobile phones (thus introducing NFC enabled mobile phones)

creates a big opportunity for the ease of use and acceptance of the NFC ecosystem.
NFC reader: An NFC reader is capable of data transfer with an NFC component. The
most common example is the contactless POS (Point of Sale) terminal which can
perform contactless NFC enabled payments when an NFC device is touched against

the NFC reader.

NFC tag: An NFC tag is actually an RFID tag that has no integrated power source.
NFC works in a very intuitive way. Two NFC devices immediately start their

communication as they are touched. The touching action is taken as the triggering condition
for NFC communication. This is actually an important feature of NFC technology. In the
NFC case, the NFC application is designed so that when the mobile touches some NFC
component with the expected form of data, it boots up. Hence, the user does not need to
interact with the mobile device after she touches one appropriate NFC device which may be
an NFC tag, an NFC reader, or another NFC enabled mobile phone. This is a very useful
property of NFC communication that provides ubiquitous computing.
For each NFC communication session, the party that starts or initiates the
communication is called the initiator, whereas the device that responds to the requests of the
initiator is called the target. This case is analogous to the well-known client server
architecture. Remember that in a client server communication the client initiates the
communication and the server responds. In NFC communication, it is no different.
In an active/passive device approach, when an NFC component has an embedded
power source, it can generate its own RF field, and naturally initiates and leads
communication. This device is called an active device. On the other hand, if it does not have
any embedded power source, it is called a passive device and can only respond to the active
device.
The initiator always needs to be an active device, because it requires a power source
to initiate the communication. The target, however, may be either an active or a passive
device. If the target is an active device, then it uses its own power source to respond; if it is a
passive device, it uses the energy created by the electromagnetic field which is generated by
the initiator that is an active device.
Consider an NFC tag which is a low cost and low capacity device. It does not contain
any power source and needs an external power source to perform any activity. Thus, an NFC

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tag is always a passive device and always a target, since it does not include any energy source
by design. It stores data that can be read by an active device. (Coskun, Ok, & Ozdenizei,
2012)
2.2.2

NFC Security

As with all information systems, NFC based systems are subject to attacks that
threaten system security and user privacy. Each operating mode of NFC has a different
architecture. Hence, attacks and defense mechanisms are mostly subject to different use
cases. When NFC based systems are analyzed from the security point of view, we should
consider the security concerns related to the NFC tag, NFC reader, smart card,
communication and backend systems separately.
Remembering that the NFC tag is actually an RFID tag, we can make use of the
knowledge that is accumulated by using RFID tags to handle the security of the same tag in
NFC. Traditionally, the following are the security issues related to the NFC, or RFID tag:

Tag cloning: The attacker may try to clone, or create an exact copy of a valid tag.
Tag content changes: The attacker may try to modify an NFC tag to change its

content.
Tag replacement and tag hiding: The NFC tag may be replaced by a malicious tag,
so that the latter tag performs illegal actions as it is designed to do.

(Coskun, Ok, & Ozdenizei, 2012)

2.2.3

Usability in NFC

NFC technology is declared as easy to use and simple in NFC Forum. In order to use
NFC, all a user needs to perform is to hold NFC enabled devices together. In this way, users
can access services, set up connections, make payment, or use a ticket. Up to now, only a few
studies have performed usability analysis on NFC to measure the success of trials. Here we
summarize some of the studies on NFC usability.
In [2] subjective usability of a student council voting is studied and compared with a
web based voting scenario. NFC voting gained a higher usability than web based voting with
a score of 82.75 whereas web based voting gained a score of 78.50 out of 100. The results of
the usability test showed that NFC technology has the potential to increase the usability of
systems. As a result, the rise of NFC compatible mobile phones and services will bring new
opportunities to make our lives easier. In the context of voting, NFC provided a practical and
easy to use environment.

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Another study [3] also performed usability tests on NFC to identify how NFC based
systems could be used to improve mobile solution workflows and usability. The study
showed that NFC can improve mobile workflows by solving different related problems. In
the pilot cases, NFC technology dealt with the following problems:

Access to real-time information, applications and instructions in the field;

Real time updating of data;
Removal of human errors;
Reducing users memory payload;
Creating ability to verify peoples presence in different locations.

The study concluded that NFC based solutions are easy to use, but the small and
limited keyboard of mobile devices causes difficulties for the design of the models. NFC
based solutions should take into account the place of the tags, ease of the application usage,
and the amount of textual input. The study showed that user friendliness was taken into
account in the pilots, but it did not always impact on the user experience.
Another study on user experiences and acceptance scenarios of NFC applications [4]
showed that simple NFC technology must beat the alternative technologies in terms of user
experience and performance criteria especially when both technologies provide nearly the
same end-user functionalities. (Coskun, Ok, & Ozdenizei, 2012)
2.3 Smart Card
(microprocessor card), which for convenience is incorporated into a plastic card
the size of a credit card. The first smart cards in the form of prepaid telephone smart cards
were launched in 1984. Smart cards are placed in a reader, which makes a galvanic
connection to the contact surfaces of the smart card using contact springs. The smart card is
supplied with energy and a clock pulse from the reader via the contact surfaces. Data transfer
between the reader and the card takes place using a bidirectional serial interface (I/O port). It
is possible to differentiate between two basic types of smart card based upon their internal
functionality: the memory card and the microprocessor card.
One of the primary advantages of the smart card is the fact that the data stored on it
can be protected against undesired (read) access and manipulation. Smart cards make all
services that relate to information or financial transactions simpler, safer and cheaper. For this
reason, 200 million smart cards were issued worldwide in 1992. In 1995 this figure had risen
to 600 million, of which 500 million were memory cards and 100 million were
microprocessor cards. The smart card market therefore represents one of the fastest growing

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subsectors of the microelectronics industry.

Figure 0-3. Typical architecture of a memory card with security logic

One disadvantage of contact-based smart cards is the vulnerability of the contacts to

wear, corrosion and dirt. Readers that are used frequently are expensive to maintain due to
their tendency to malfunction. In addition, readers that are accessible to the public (telephone
boxes) cannot be protected against vandalism.
2.3.1 Types of Smart Cards: Capability Based Classification
Smart cards are plastic cards with an embedded microprocessor and memory. The
smart cards that have microprocessors have various functionalities. Smart cards, in terms of
their capability, can be divided into two major groups: memory based and microprocessor
based smart cards.
2.3.1.1

Memory Based Smart Cards

Memory based smart cards can store any kind of data including financial, personal

and other special information. However, they do not have a processing capability. These
cards need to communicate with an external device such as a card reader using
synchronous protocols to manipulate the data on the card. These cards are widely used as
prepaid telephone cards.
2.3.1.2

Microprocessor Based Smart Cards

The microprocessor based smart cards have on-card dynamic data processing

capabilities. They have a microprocessor, as well as a memory. The microprocessor

within the card manages the memory allocation and data management. Microprocessor
based smart cards are comparable with tiny computers, ones without internal power

15

source. These smart cards have an Operating System (OS), namely the Smart Card
Operating System (SCOS), enabling the data to be managed on the smart card and
allowing the smart cards to be multi-functional. They can store and process information,
and perform complex calculations on the stored data. They can record, modify and
process the data unlike memory based smart cards. Also, microprocessor based smart
cards have the ability to store high amount of data compared with memory cards.
2.3.2

Types of Smart Cards: Mechanism Based Classification

Smart cards are divided into three major groups in terms of the communication

mechanism with outer devices: contact smart cards, contactless smart cards, and hybrid
models.
2.3.2.1

Contact Smart Cards

Contact smart cards are embedded with a micro module containing a single silicon
IC card (or chip card) with memory and microprocessor. This IC card is a conductive
contact plate of approximately 1 cm2 (0.16 in.2) placed on the surface of the smart card
which is typically gold plated. An external device provides a direct electrical connection to
the conductive contact plate when the contact smart card is inserted into it. Transmission of
commands, data, and card status information takes place over these physical contact points.
Cards do not contain any power source; hence energy is supplied by the external
device that the card interacts with. These external devices are used as a communications
medium between the contact smart card and a host. These external devices can be a computer,
a POS terminal or a mobile device. Contact smart cards interacting with POS devices are
used for payment purposes. The dimensions of a contact smart card for payment purposes are
standardized as 85.6 mm 53.98 mm 0.76 mm, similar to current bank cards (see Figure 04). These cards also have a magnetic stripe capability. Actually the IC cards used on contact
smart cards for payment purposes are the same as those used in Subscriber Identity Modules
(SIMs) in mobile phones. They are programmed differently and embedded in a different piece
of PVC. These cards interact with external readers such as mobile phones. The physical shape
of SIM modules with IC cards can differ from bank cards, and typically they are smaller.
Contact smart cards can be used by inserting them in the reader device.

16

Figure 0-4. Financed based contact smart card standard dimensions.

The standards related to contact smart cards are ISO/IEC 7810 and mainly ISO/IEC
7816. They define the physical shape and characteristics of contact smart cards, electrical
connector positions and shapes, electrical characteristics, communication protocols including
commands exchanged with the card, and basic functionality. According to the ISO/IEC 7816
Standard, the IC card has eight electrical gold-plated contact pads on its surface (see Figure
2.19): VCC (power supply voltage), RST (reset the microprocessor), CLK (clock signal),
GND (ground), VPP (programming or write voltage), and I/O (serial input/output line). Only
the I/O and GND contacts are mandatory on a typical smart card; the others are optional. Two
contacts are reserved for future use (RFU). The usage of communication paths C1 through C8
are [4,7]]:

Figure 0-5. Contacts pads on and IC card

C1: VCC is the supply voltage that drives the chips and is generally 5 V. It is possible
to foresee chips that allow lower energy consumption.

17

C2: RST is the reset signal line that initiates the state of the IC after the power is on.
C3: CLK is the clock signal which is to drive the logic of the ICC and is also used as
the reference for the serial communications link. This line controls the operation
speed and provides a common framework for data communication between the

interface device (IFD) and the integrated circuit chip (ICC).

C4: RFU.
C5: GND refers to the ground signal line which provides a common electrical ground

between the IFD and the ICC.

C6: VPP is the power connection or programming voltage input that is used for the
high voltage signal which is necessary to program the EPROM memory. Until the late
1980s, it was necessary to apply an external voltage to program and erase the
EEPROM, since the microcontrollers used at that time did not have charge pumps.
However, since the early 1990s it has been standard practice to generate this voltage
directly from the chip using a charge pump, so this contact is no longer used. The C6
contact cannot be employed for any other function, otherwise it would conflict with
the ISO standard. C6 is right in the middle between the GND and I/O contact, so C6 is

neither used nor eliminated.

C7: I/O is the serial input/output connector that provides a half duplex communication
channel between the card reader and the smart card. This signal line is used for
communication and sending commands to the chip within the smart card. The

protocols used to communicate with a smart card are referred to as T0 and T1.
C8: RFU.

2.3.2.2

Contactless Smart Cards

The contactless smart card is a type of smart card that is processed without having to
come into contact with an external device. It is a combination of a microchip (or IC chip)
embedded within it and antenna which allows the card to be tracked (see Figure 2.20). This
antenna is formed by several wires. In contactless smart cards, information is stored in the
microchip which has a secure microcontroller and internal memory. Unlike the contact smart
card, power supply to the contactless smart card is achieved with the embedded antenna on
the smart card. Data exchange between the smart card and the external device such as a smart
card reader is performed with the help of this antenna. Electromagnetic fields provide power
for the card as well as exchanging data with the external device.

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Figure 0-6. Contactless smart card

Contactless smart cards have the ability to securely store and manage data. They also
provide access to the data stored on the card; they perform on-card functions such as enabling
mutual authentication. They can easily and securely interact with a contactless external
reader.
The contactless communication can be performed only with devices in close
proximity. Readers with RFID reading capability are marked with a special symbol as shown
in Figure 2.21. Both the external device and the contactless smart card have antenna, and
communicate using RF technology at data rates of 106848 kbps. Most contactless cards also
derive power for the microchip from this electromagnetic signal.
When a contactless smart card is brought into the electromagnetic field of the card
reader, the energy transfer starts from the card reader to the microchip on the smart card. The
microchip is powered by the incoming signal from the card reader. Once the microchip is
powered, the wireless communication is established between the smart card and the card
reader for data transfer.

19

Figure 0-7. Universal contactless smart card reader symbol.

Contactless smart card technology is used in applications that process private

information such as health data and identity data to be protected. It is also used in
applications when fast and secure transactions are required such as transit fare payment,
electronic passports, and visa control. Contactless smart cards are often used for hands-free
transactions. Applications using contactless smart cards must support many security features
such as mutual authentication, strong information security through dynamic cryptographic
keys, strong contactless device security, and individual information privacy. Contactless
smart card technology is available in a variety of forms such as in plastic cards, watches, key
fobs, documents, mobile phones, and other mobile devices or handsets
2.3.2.3

Hybrid Models

Additionally, it is possible to see hybrid models of smart cards such as dual interface
cards and hybrid cards:

A dual interface card has both contact and contactless interfaces, that contains
only one chip. Such a model enables the same chip to be accessed by both the

contact and the contactless interface with a high level of security.

A hybrid card contains two chips. One of those chips is used for a contact
interface and the other one is used for a contactless interface. These chips are
independent and not connected.

(Coskun, Ok, & Ozdenizei, 2012)

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CHAPTER III
RESULT AND DISCUSSION
RFID is a one of the main results of the development of information technology
which enables the exchange of data between the RFID reader and an electronic RFID tag
using radio signals. that RFID can be used for identifying and tracking, RFID tag or label
previously had to manually affixed to the object, then the data transmitted via radio signals,
which has a range that varies depending on the frequency and magnetic field.
NFC is a new technology, in the form of short-range, high frequency, low bandwidth
and wireless communication technology between two NFCs Devices. NFC is a technology
development of RFID, like RFID, NFC also communicate using radio waves with a
frequency of 13.56 MHz only the distance is not as far as RFID, NFC devices will be in touch
within a very close distance, which makes one of the main reasons why the NFC is more
secure than RFID. in addition, the advantages of NFC technology can also be integrated into
the mobile phone so that it can be used easily. with the implementation of NFC into mobile
phone, either already become one with the device, or use NFC tags. NFC can be one of the
main solutions that should be considered to help reduce the use of paper money.
Indonesias mobile and rapidly urbanizing population is driving demand to move
money around the country and to handle payments with greater efficiency. Money transfers
for payments and remittances are pervasive, with 83% of persons above the age of 15
reporting sending or receiving a remittance or payment transaction in the previous month.
The majority of these transactions happen in cash, which also means a great opportunity for
mobile enabled financial transactions. 4 Mobile operators recognized this opportunity and
take the chance to launched mobile money services. Telkomsel was first launching TCash in
2007; Indosat followed in 2008 with Dompetku. When XL launched XL Tunai in 2012, the
three operators had been joined by a small number of third parties and banks also moving into
the mobile money space.
There are a lot of challenges to implementation NFC in Indonesia, one of them is the
government regulation. When mobile money was launched in Indonesia, a regulatory hurdle
stood in the way of consumer uptake. Until recently, an agent could not perform a cash-out
unless the outlet had a remittance license issued directly by Bank Indonesia. To withdraw
cash from their mobile money wallet, customers had to go to an outlet managed directly by

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their mobile operator, but each operator has only 25 on average nationwide. This severely
limited the service options for unbanked customers in remote areas and closed the door to
anyone interested in building a capillary distribution network for financial services.
Bank Indonesia, Indonesias central bank, wanted to create an enabling environment
for mobile banking that would advance financial inclusion. The Regulation on Funds Transfer
issued in March 2013, followed by branchless banking pilot guidelines in May 2013, opened
the way for smoother distribution of mobile money. Bank Indonesia appears keener than in
the past to allow service providers to build networks of agents who can perform cash-in and
cash-out for their customers, as well as open mobile money accounts on their behalf. Since
the regulation came in place, several thousand mobile money agents have signed up to mobile
money schemes.
Beside the government regulation, Indonesians people also become the challenges
and the problem at the same time. As you can see, a lot of people start to using NFC
Technologies thanks to T-Cash and their promotions. This phenomenon becomes a progress
and can also cause problems, as increase the number of users of NFC tags in Indonesia
mostly because the deals offered by the NFC service providers. however, after all the offer
runs out, will use NFC services will be reduced as well. Indonesian people is not considering
making the NFC as one of their main payment instruments. therefore, will require a long time
for the people of Indonesia to adapt to NFC technology.

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CHAPTER VI
CONCLUSION AND RECOMMENDATION
4.1 Conclusion
NFC technology presence in Indonesia, both of which have been integrated into
mobile phones, or which require NFC tag, is still fairly quite common use in Indonesia.
besides that NFC service users in Indonesia is also limited by the different providers. 3
provider issuing e-money products that use NFC technology, Telkomsel, Indosat and XL
Axiata, only Telkomsel are successfully implemented to its users, while two other providers
have not been too successful implementation. besides problems provider, Indonesian public
awareness of the need of buying and selling without cash is still lacking, is also becomes an
obstacle to implementing NFC technology in everyday transactions to the fullest. Indonesian
society still do not feel that e-money or e-wallet can be considered as the main payment
instruments. This will require more than 5 years to really succeed to implement NFC
optimally to society in Indonesia, which may later be followed by the growing number of
phones with NFC in it, which will further support the future implementation of NFC
technology.
Indeed, the use of NFC technology in Indonesia had an improvement even though it
would require longer period of time. At least, contactless smart card is already applied in
several sectors such as transportation for TransJakarta and also trains, which is can help to
push towards implementation of NFC technology. In addition, the involvement of
government is one of the important factor to make implementation of NFC technology in
Indonesia more, through the Ministry of Communications and Information should turned
away quickly in issuing ministerial decrees of implementation NFC technology.
4.2 Recommendation
The implementation of NFC Technology in Indonesia is still need more development,
and to make the NFC Technology to be applied as payment tools in everyday transaction, the
NFC mobile service providers needn to cooperate with the government like what they do to
smart card. Indonesias people start to using smart card because the government.

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Indonesian society initially started to implement the use of smart cards as the
government requires payment using smart cards for Transjakarta bus passengers, if they do
not have a smart card, they cannot ride the Busway. as well as to ride the train, they must use
a smart card, although the practice of implementation to the community about the use of
smart cards as a payment instrument carriage, somewhat failed because many people are still
confused on how to use the smart card. but at least this way inevitably society must accept the
changes that occur in the field of transport payments made by the government.
the above methods we can use for the application of NFC technology in Indonesia for
activities of daily transactions, although it does in countries like Indonesia will take a long
time to get used to it. we can take the example of developed countries such as korea south,
which has been successful in reducing the number of transactions of money and replace it
with a smart card and mobile payment in large cities. so it can be predicted that the next 3-5
years Indonesia has been able to implement NFC technology as the main payment tools with
the help of government and each mobile provider.

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