IBM’s dual-factor authentication on NFC enabled devices; IBM in Payments?

According to a report from ABI Research the total number of NFC devices in usage would exceed 500 Mn in 2014. This may be a positive indication for the rise in adoption of NFC. That’s good but one of the recurring problems in the mobile payments space has been fraud and security breaches.

IBM Scientists from Zurich, in an effort to curb fraud and security breaches have come up with a new mobile authentication security technology based on Near-Field Communication (NFC). On October 18, 2013 IBM shared a press release on this new development; the press release can be accessed here.

IBM says that this technology would add an additional layer of security while using an NFC-enabled device & a contactless smartcard for mobile transactions. The contactless smartcard could either be an ATM card issued by a bank or it can even be a employer issued identity badge.

IBM’s new technology works on similar principles to that of a dual-factor authentication security measure. Here is a brief description of a dual-factor authentication. While authenticating a transaction, a user has to key in both the password and a computer generated verification code sent through an SMS.

Sharing his views on the launch, Diego Ortiz-Yepes, a mobile security scientist at IBM Research says “Our two-factor authentication technology based on the Advanced Encryption Standard provides a robust security solution with no learning curve.” Speaking about the ease of use, he says “If something is cumbersome to use, with 20,000 steps to get yourself authenticated with your bank, it could have the coolest math behind it but nobody’s going to use it.”

You can watch the video from IBM, explaining how their two-factor authentication process works involving an NFC enabled device and a smartcard:

Source: IBM Research

LTP View: IBM’s move, keeping NFC enabled devices in mind could be a positive one considering that atleast half of the industry is optimistic about the rise of NFC. The technology released by IBM is limited to Android devices 4.0 and up. IBM’s move of introducing this technology should not be seen as a surprise, as all global Tech majors are looking at payments and mobility closely. This move was also to support the IBM Worklight mobile app platform. IBM Worklight is mainly used to develop and manage secure mobile transactions for customers. We’re yet to see if IBM also plans new developments targeting iPhones and non-NFC enabled devices.

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Vaseem

Vaseem Khan is a founding member and a primary author at Let's TALK Payments. He is a Payments enthusiast and an avid reader. He loves being involved on initiatives related to Technology, Startups & Payments. He has been associated with companies like Gallup as a Management Consultant and Oracle as an Account Manager.

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