Objects-as-a-Service (OaaS) and why things need identities

Ann Cairns, Executive Vice Chair at MasterCard, said back in 2018 that it could be the year when (thanks to the incredible speed with which new technologies are adopted) physical wallets could soon be a thing of the past as the world wakes up to wearables. Ann said, correctly, that wearable devices are getting a “new lease of life by becoming payment enabled” and noted forecasts predicting that two-thirds of wearables would have payment functionality by 2020. This didn’t quite happen, for reasons I will return to shortly, but as a baseline note her point that five years ago the global sales of smart wearables were already at $416 billion.

In 2019, Mastercard highlighted that wearables are about fashion as well as function. They pointed out that as the technology that powers wearables gets smarter, fashion brands rather than technologists (or payments geeks) are driving the evolution of the market. Even then, one in five adults in the USA were already wearing a smart watch or fitness strap and they expected the wearable tech market to reach something like $30 billion in 2020.

Wearables Market 2020

Global wearables markets 2020 (Source: IDG, 12/20).

In 2020, as these figures from IDG show, the wearables market (dominated by Apple) continued to grow and is expected to maintain a double-digit rate of growth through 2024. In the US, the wearable device most frequently used for payments is the smartwatch (more than mobile phones or contactless cards). Interestingly, recent research shows that college graduates are more frequent users of smart watches for payments than non-college graduates and that they use their wearables to pay more than 200 times a year, almost double the usage of mobile phones and 50% more than cards.

The market for wearables that can do interesting things (eg, payments) is going to grow more than that though, because the growth of cheap passive wearables (ie, wearables that don’t need batteries, just as contactless cards don’t need batteries) will grow faster because of the new, smaller and more cost-effective chips arriving from suppliers such as Infineon. I wasn’t surprised, therefore, to see an excellent presentation from Discover at the Women in Payments 2021 summit saying that…

Discover Wearables

So what has prevented this market from developing even faster? Well, the process of taking an “empty” microchip and loading secure credentials into it so that it can be used for payments, identity, provenance and other high value applications (the process of what card people call “personalisation”) is complex and costly. Imagine that you are running a pop festival and you want to provide rings or wristbands or badges or whatever than can be used to gain entry, to pay for drinks, to identify someone in an emergency. Taking 20,000 wristbands and loading credentials into them and then making sure each wristband gets to the right person is a logistical challenge hence the technology tends to be applied at the high end of the market. There are companies that make some beautiful wearables that can be used in this way. I love the stuff that Tovi Sorga has and I think this illustrates that Mastercard point about the role of fashion. Amex, to give another example, have just released a Prada leather bracelet with a contactless chip in it for their Centurion cardholders.

Getting the right bracelet with the right payment card into the hand of the right cardholder is complicated though. The logistics are a challenge because the devices must be “personalised” when they are ordered and then correct distributed. As a way of reducing the logistics costs, though, suppose there was a decentralised way to do the personalisation needed to turn nice wearables into secure, smart objects? Imagine that the pop festival organiser sends you a wristband and then you use your own mobile phone to load one of your payment cards into the wristband? Or you use the (eg) Discover app on your phone to create a prepaid card valid for a week and load $100 onto so that you can leave your phone in your pocket while you enjoy the show? Well, this is what Digiseq, a UK start up has done. And this is only one of the reasons why I was flattered to be asked to become their Non-Executive Chair as they go into their next fund-raising round. Amongst their achievements already is the launch of KBC wearables in Belgium, including the Rosan Diamond key fobs that proved popular last year, creating a Lucozade bottle that you could use to pay for travel in London and putting chips into the Golden Globe awards so that their authenticity and provenance could be validated.

Provenance is Forever

Provenance is important. I wrote about it more than a decade ago using the example of luxury goods such as watches and asking how you would tell a fake Rolex from a real one. It’s a much more complicated problem than it seems at first. Suppose an RFID chip is used to implement an ID in luxury goods, authentic parts, original art and so on. If I see a Gucci handbag on sale in a shop, I will be able to wave my phone over it and obtain the ID.  My mobile phone can decode the number and then tell me that the handbag is Gucci product 999, serial number 888. This information is, by itself, of little use to me. I could go onto the Gucci-lovers website and find out that product 999 is a particular kind of handbag, but nothing more: I may know that the tag is ‘valid’, but that doesn’t tell me much about the bag. For all I know, a bunch of tags might have been taken off real products and attached to fake products.

To know if something is real or not, I need more data. If I wanted to know if the handbag were real or fake, then I would need to obtain its provenance as well as its product details. The provenance might be distributed quite widely. The retailer’s database would know from which distributor the bag came; the distributor’s database would know from which factory the bag came and Gucci’s database should know all of this. I would need access to these data to get the data I would need to decide whether the bag is real or fake.

The key to the business model is not the product itself but the provenance, so delivering a service means linking the personalisation and the provenance under the control of the brands. This is where Digiseq is going. In January, one of the world’s leading chip manufacturers Infineon Technologies AG announced that they will be working Digiseq on their  SECORA™ Blockchain NFC technology to deliver secured identity data. This is an advanced solution that connects the digital data recorded on blockchain to physical items, allowing for just this comprehensive verification of the identity of items, thereby eliminating the challenge of product substitution and heightening supply chain transparency.

cheap chips can turn almost anything into a smart object and with the right provenance service in place turn those smart objects into objects-as-a-service (OaaS). Click To Tweet

The ability for brands to choose whether to give customers high end wearables for select markets or to push into the mass market with wearables that customers can personalise themselves, using the mobile phones to add/remove payment cards, access codes or identities at any time, is a game changer. But it is only the beginning. The secure microchips that are inside the Prada bracelet or the Golden Globes can be inside everything from smart watches to luxury handbags, from aircraft parts to bottles of whiskey. These inexpensive RFID chips turn almost anything into a smart object, and with the appropriate back-end provenance system in place, they can turn those smart objects into objects-as-a-service (OaaS).

Objects-as-a-Service are going to be… well, huge. If you want to learn a little more about this incredible new market and the opportunities that it presents, come and join me at the Digiseq webinar on 22nd April 2021 at 9am UK time. Sign up here.

New NFC rumours about the “internet of things”

[Dave Birch]

The rumours that Google and a number of other organisations have formed a study group to look at the idea of offering people free injectable NFC chips in return for special offers, coupons, additional loyalty points an a variety of value-added services around Android NFC phones are quite interesting. I imagine that the idea is to make Android more attractive than iPhone/iPad by making the owners part of the much-talked about “Internet of things”. This is hardly a new idea, but what is interesting is that the deployment is being proposed so soon.

Katrina Michael, associate professor of the University of Wollongong’s school of information systems and technology, and author of scientific paper Towards a State of Uberveillance, said subdermal chip implants in humans could be commonplace within two to three generations.

[From The Next Generation May be ‘Chipped’ – PCWorld]

Why would I want one of these? Well, for example, suppose that I take my URL “www.dgwbirch.com” and encode it in some way (you can see an example here) and add that to my chip, then anyone who taps me with a Google Nexus S loaded with the right software could read it and have it added to their bookmarks immediately. Some people might want to have their Facebook “Real Name” coded into the chip, but I think that for rather dull middle-aged businesspersons (such as myself) the LinkedIn profile would be better. Who knows – the point is that surveys have shown that whatever the Privacy International’s of the world might think, people like the idea:

“We just carried out a survey and one out of four people are happy to have a chip planted under their skin for very trivial uses for example to pass gates more quickly at a discotheque for example and to be able to pay for things more quickly in the supermarket,”

[From CeBIT: Quarter Of Germans Happy To Have Chip Implants | eWEEK Europe UK]

The advantages are obvious. You would never have to remember a wallet, an ID card, a bus pass, whatever, because it would be permanently embedded in you. It is not difficult to see why Google might want to implant chips in people, and it’s interesting to note that the rumours coincide with more stories about the imminent demise of QR codes.

But last December, Google started sending out window decals with NFC chips to participating businesses in Portland, Oregon. Earlier this week, Google officially dropped support for QR codes from the product.

[From Google: NFC Is Replacing QR Codes.]

Not everyone is as enthusiastic about the chipping as I am. I’m not an expert on the Book of Revelations, so I don’t understand the theological objection to tracking at 13.56GHz as opposed to optical wavelengths, but it should be noted that there are people who are against this idea.

One group believes that the chips are a mark of the beast and are against implants. In biblical prophecy, this is a number written on the forehead, to mark those controlled by an evil power.

[From RFID Gazette: 16 Barriers to RFID Ubiquity]

Well there will always be luddites like these around, but let’s be sensible about this. None of the rumours* have suggested that Goggle will insist on having the chips implanted in the forehead: when I was looking at this issue a while back, I was imagining that fleshier areas would be more appropriate. Anyway, I’m curious why people would be so upset about this very practical use of NFC to solve a wide range of social problems.

Yes, use these chips to track dogs and animals but not human beings. This method has not only been suggested for use against white slavery and child theft, but also for many other uses.

[From Should chip-implant tracking be used to stop white slavery and child theft? – by Esther Stafford – Helium]

All in all, I think that this is a really interesting use of NFC and I fully expect to see it supported in the iPhone 5 [how wrong can you be!! — Ed.].

In the future, everyone will be famous for fifteen megabytes