The use of NFC (near-field communication) in mobile payments has yet to penetrate the market, but many are still hopeful it will take off as a key mobile-commerce solution. Juniper Research, www.juniperresearch.com, for example, forecasts that NFC will facilitate transactions valued at $74 billion by 2015—three times the estimated value of the market in 2011.
And while NFC-enabled phones are not a new technology—Nokia, www.nokia.com, launched a model back in 2006—technology and software providers continue to develop solutions, optimistic that the mobile wallet will help NFC reach its full potential. Google, www.google.com, helped generate buzz last year after releasing its Google Wallet mobile-payment app, which enables users to store credit card and gift card information and then use it for mobile-payment transactions. Using NFC technology, consumers can make payments in the checkout line by simply tapping their cellphone on any MasterCard PayPass-enabled terminal.
More companies are jumping on board. Bump Labs, http://bu.mp/labs, for example, just launched a new payment app called Bump Pay that uses NFC to allow users to pay friends by simply “bumping” their phones together. Consumers simply need a phone, an email address, and PayPal account, and they can perform quick mobile-payment transactions. According to the startup, splitting a lunch bill has never been so easy.
Operators also remain committed to the technology. KDDI, www.kddi.com, one of Japan’s largest cellular operators, just announced a collaboration with digital security provider Gemalto, www.gemalto.com, as part of its NFC rollout in Japan. KDDI launched its NFC services in late January, and at least two other operators are expected to launch NFC services in Japan by the end of the year. In fact, the region’s three leading operators—KDDI, NTT Docomo and Softbank—recently formed the Japan Mobile NFC Consortium to coordinate the adoption of international standards for NFC. The goal is to allow end users to use their NFC services both domestically and outside of Japan.
All of this activity suggests that NFC’s future is bright. However, not everyone is convinced mobile payments are the right conduit for NFC. Paul Gelb, a vice president at Razorfish, www.razorfish.com, believes NFC yields a much broader opportunity than what arises from contact-free payments and a slice of transaction fees.
“NFC can connect a consumer with the physical world in ways that generate an infinite number of new engaging interactions for consumers and valuable data points for businesses,” Gelb says.
Like any emerging technology, NFC is still trying to find its place within the consumer world—and everyone has an opinion of where it should land. Regardless of its killer app, most agree NFC will eventually find its way into the market. And while operators and tech giant disruptors may try their hardest to push the technology forward, consumers will be the ones to decide when that will actually happen. |