The NFC technology for swipe-based payments from a cellphone or smartcard has had a string of false dawns, despite wide acceptance in Japan and impetus from handset makers. But 2012 really does look set to be the year it reaches mass markets, as operators round the world launch extensive trials, and device vendors promise they will have plenty of products in place for commercial services from year end.
Apple may have disappointed the NFC community by delaying its own announcements ‘ though the ‘iPhone 5’ is still expected to feature the technology when it ships later this year. But Google is plowing ahead, with trials imminent in major US cities; Microsoft and RIM will integrate NFC in their platforms; and all four national US cellcos are following their European counterparts in setting up alliances with financial and retail partners.
Last week, the NFC Forum announced that Google had become a member, joining 30 other new joiners plus existing players ‘ mainly cellcos such as the US big four and the leading NFC service provider NTT DoCoMo; plus China Mobile, SKT, TeliaSonera and others. As well as this impetus, the shortage of devices will be addressed soon.
There are still some question marks, especially in the US, in relation to probes of potential abuses of private data shared via mobile applications. But as NFC finds its way into high end handsets, not just the emerging markets targeted already by Nokia and Samsung, it will gain real momentum. This week, Samsung announced a partnership with Visa to run an m-payments scheme for the London 2012 Olympics, using a Visa enabled SIM card.
Meanwhile, Amazon might not seem to have an obvious interest in a technology for making bricks and mortar purchases, but it is reported to be planning an m-payments system as part of its bid to create an end-to-end content and apps platform for Android. Citing two sources with knowledge of the project, Bloomberg says the Amazon Payments unit is currently assessing its technological options for using NFC both for swipe-based transactions in bricks and mortar stores, and for mobile payments. It will apparently decide how to proceed during this summer.
Amazon.com already offers various m-commerce applications such as Amazon Deals, Price Check and Windowshop for iOS, and similar facilities for Android, BlackBerry and WP7. In mid-2010, it said that consumers worldwide now order more than $1bn worth of products per year from their mobile devices.
But despite Google’s imminent New York trials, the biggest moves in the US are being led by the carriers. Sprint Nextel is the latest to make its move, and could even pip its main rivals to the post by going live this year.
Sprint is the only one of the big four cellcos which is not involved in the Isis venture to set up a carrier driven mobile payments platform ‘ one that would bypass not just Google and PayPal but the major credit card firms. However, Isis said this week that it would not launch its first pilot scheme until early to mid-2012, with Salt Lake City, Utah its initial market. It has signed a deal with the Utah Transit Authority to make the city’s transit system NFC-capable.
Kevin McGinnis, Sprint’s VP of product platforms, told Bloomberg that the operator was talking with payment networks and device makers. ‘We intend to make this an open solution where consumers can use their phone in a variety of physical locations,’ said McGinnis. The report speculates that Sprint will adopt a different business model to that of Isis, taking a revenue share from targeted advertising or coupons, rather than a percentage of each transaction. This would help it to deepen its knowledge of, and ties to, its customers and build added value services on top of that.
It is taking a different approach from Isis in other ways too. When the joint venture announced its plans, Sprint told FierceWireless: “Given our open philosophy, Sprint does not want to compete with the card companies and banks that people already may use. We want to partner with companies that help our customers pay in the manner they choose. We’re not here to recreate a proprietary solution but to enable our partners and their customers to connect in the easiest and most productive way possible.” The operator already offers Mobile Wallet, which gives smartphone users a single PIN code that works with any of their bank accounts and credit cards, and enables physical or digital purchases to be charged to existing Visa, MasterCard or Amazon accounts (but not the carrier bill).