The NFC-TAN process uses Near Field Communication, a standard that allows electronic devices to transmit data across short distances. When a customer makes a bank transfer, the bank sends a transaction authentication number for each transaction, and the transaction is only confirmed when the TAN has been entered. Until recently, TANs were sent via text message or generated by a TAN process, Science Daily reports.
Dr. Bernd Borchert of the University of Tubingen’s Wilhelm Schickard Institute of Computer Science said that the process was originally very risky because malware on a device could read the person’s password and enable other individuals to log onto the account through the same phone. The new process is similar but now uses a 2D code which can be scanned into the phone through a special banking app.
After a transaction is confirmed on the phone’s display, the customer holds his account card to the phone, which then generates the TAN and transmits it through NFC to the phone. The process does not cost more to initiate or run, and since one in four smartphones is NFC-compatible, many banks are planning to introduce NFC-capable account cards, according to Science Daily.
The Tubingen designers of the new process plan to market the new technology with the assistance of GFT Technologies, a Stuttgart-based technology company.