Smartphone meets debit card: NFC-TAN makes transactions secure and straightforward

GFT and the University of Tübingen in Germany transfer technology successfully out of research and into business

Hanover/Stuttgart, 7 March 2013 – A collaboration between GFT Technologies and the University of Tübingen in Germany has resulted in the development of a new authentication process for online banking. The system involves using Near Field Communication (NFC) to share transaction codes directly with a smartphone to confirm payments. For bank customers, the new application spells security and ease of use. The two development partners are unveiling the software solution to the general public for the first time at this year’s CeBIT in Hanover. This latest example of successful knowledge transfer from research into business will be showcased until this Saturday at the world’s largest IT trade fair on stand D30_64 in hall 16.

Until now, online banking has meant making a tough decision: Do I want total security or maximum ease of use? The newly developed NFC-TAN system promises both in the same solution. Some existing solutions involve a transaction number being sent to users via SMS, a process that is not without risk as malware could harvest passwords and intercept the text message. The conventional ChipTAN processes involve an additional end device, but they have a number of shortcomings in terms of user-friendliness.

Enter the alternative: NFC-TAN. Bernd-Josef Kohl, Head of International Business Consulting the IT solutions provider GFT, explains the principle: “The bank’s customers are shown a code on their computer, which they then scan with their smartphone. To do this, all they need is an app from their bank.” The customer then holds their debit card next to their smartphone and they are automatically provided with a TAN. “NFC is ideal for transmitting data between a debit card and a smartphone. To a certain extent, the mobile works like a chip. It doesn’t even need reception. Everything is contactless, which means added security,” states Kohl.

Another benefit to customers is that there are almost no extra costs, assuming they own a relatively modern mobile phone. Currently, one in four purchased smartphones already uses NFC to share data. In parallel to this, numerous banks are planning to introduce NFC-enabled debit cards in the near future. The German savings bank, Sparkasse, has already been using this solution as standard since last year.

The University of Tübingen was quick off the mark when it registered the patent for this innovative system four years ago. Students at the university have been continuously optimising the system ever since. The collaboration with GFT helped move the project into the fast lane. The two parties agreed to split responsibilities, with the University of Tübingen carrying out all development work on the software and making technical adjustments to the chip, while GFT looked after acquisition and the consulting of potential clients. “We consider the detailed application options within the client setting and carry out testing and prototyping,” states Kohl.

The collaboration is still only in its twelfth month. Dr. Bernd Borchert of the Wilhelm Schickard Institute at Tübingen University first met Bernd Kohl at last year’s CeBIT, where they hit upon the idea to start collaborating. “Transferring know-how out of research into business practice only really works when the partners who join forces are steadfastly pursuing a common goal. With this collaboration, it’s worked splendidly,” states Borchert. The collaboration project has the backing of the Technology Transfer Office at Tübingen University.