NFC: An Overview
If anything should support the demand for Near Field Communication (NFC), the recent holiday credit card security breaches at US-based retailer Target, and other high profile retailers, is all the incentive the public should need to demand the technology.
The driving concept behind NFC is that the individual’s cellphone or mobile device serves as a virtual wallet. However, many argue that it is a much safer method of payment than swiping a card through a chain retailer’s traditional credit card processing port.
If the merchant has the appropriate technology, the customer can simply swipe his or her NFC loaded phone over a receiver and the payment is made via credit card or debit card of choice. Voila! No cash, no fumbling your credit card and no trace of the consumers card stored with the retailer.
Near Field Communication technology is heavily encrypted. This is the safest way to transact business in the virtual world. Amazingly, the technology has been available for a number of years, which only raises the question why it is not dominating the marketplace?
The largest holder of credit card information on the planet is Apple. More than 450 million consumers have recorded credit card information with iTunes. Apple is followed closely by such giants as Microsoft, Amazon, Sony, PayPal and Network.
Apple has been slow to deploy the chips necessary for the technology although other mobile phone providers have. One of the first was Samsung. Many users do not realise this “portable wallet” feature exists in the phones they use.
When Apple released its iPhone 5, many industry experts were dumfounded that NFC or at least an Apple version was not included. On the other and, Apple believes not enough merchants have invested in the technology to merit the inclusion and expense of the chip.
And, of course, there is the Apple mindset. Apple likes to be first or at least more innovative than the competition. To a degree, Apple’s resistance to offering the app has stymied the technology.
Apple is developing a product called Passbook, a Near Field Communication technology that will rival and most likely exceed capabilities offered by Samsung, Sony Experia, Google Nexus and the new Nokia Lumias.
Passbook will be a mobile app that, “Pulls together QR-based and smartcode-based loyalty cards, tickets and coupons on the new iPhone.” Industry analysts describe Passbook as the first digital wallet.
However, NFC is more than a secure and fluid payment technology. It is also effective for data exchange. Of course, it can only work when a receiving chip can accept the data. Therein is the challenge for merchants who want to see more consumers using the technology before they invest.
The failure of this technology to be in the marketplace is a surprise to PayPal and similar online money processing services. Tudor Aw, the head of KPMG’s European technology sector, said, “The lack of an NFC chip to enable mobile payments is perhaps the biggest surprise and disappointment … The interesting question is whether this omission will mean further delay in mobile payments taking off or if it presents an opportunity for its competitors to take a lead in this field.”
Importantly, NFC is being advocated by some influential powers in mobile technology. Verizon Wireless, AT&T and T-Mobile are carriers that have endorsed Near Field Communication technology from Isis. The technology is also supported by major financial institutions lie JP Morgan Chase, Capital One Financial and American Express.
Consume awareness can pay a large part in demanding NFC systems be implemented. The time has come. Imagine never having to carry your credit card or cash around. When enough consumers are aware of the significant security advantages of the technology, they will drive retailers to invest and mobile providers will respond or sink.
List of NFC Phones (NFC World)
History of Wireless Communication (Wireless Communication)