11 Dec Mobile Payments & NFC
For those who are unfamiliar with the term NFC (Near Field Communication) is a standards-based wireless communication technology that allows data to be transferred between devices from only a few centimeters apart (ie. mobile phone to terminal).
NFC is the next step from in migrating contactless payments with our credit cards to our mobile devices.
But how close are we to actually adopting NFC and mobile wallets into our daily lives?
If you’ve had a chance to read the Federal Reserve Bank of Boston’s report on Mobile Phone Technology ‘Smarter Than We Thought’ then you’ll have a pretty good idea. If you haven’t, and you’re the type who want’s more than the bottom line you can download it here.
The report outlines both NFC technology and contactless payment’s strengths and weaknesses.
Contrary to what one might think, security is one of NFC’s biggest strengths. Compare your phone to a wallet, “‘it’s this safe place that can put all of this payments information for, convenience and efficiency, for the consumer to then choose from to make a payment, just like they choose from their wallet”.
What If I lose my phone?
The same thing would happen if you were to lose your wallet, except if you were to lose your phone, credit cards are encrypted. This makes it even more difficult for a thief to make payments and steal your personal information.
How soon can I use NFC?
The biggest disadvantage is the cost of implementing NFC from the merchant’s and manufacturer’s perspective. If you already own your own terminal, then the cost of purchasing a new terminal with NFC may be a large investment. If you are renting or leasing with one of our solutions, then it can be easily upgraded at a mere $5.00 more per month.
From a manufacturer’s perspective, mobile carriers need to get enough traction both on the consumer and business side and work with all relevant stakeholders (ie. app developers & banks) for NFC to make sense.
We envision adoption happening in the next 5 years, however it truly has been a slower process than we had hoped for. Thankfully, Google has stepped up and will be offering their Google Wallet Card in the near future. This should help bridge the gap between getting rid of plastic all together and driving the demand for NFC.
What are your thoughts on NFC and contactless? Are you ready to use it?