NFC Payments – The Future of Mobile is Already Here

1. Near
Field
Communica0ons
(NFC)
Payments
–
The
Future
of
Mobile
is
Already
Here
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2. Near Field Communication
There is a lot of buzz about NFC or Near Field Communications, a technology
that allows transfer of data from smartphones by just tapping or swiping. NFC
works on radio frequency, allowing mobile phones to communicate with each
other when they are in close proximity. Bluetooth also allows data transfer
between devices. However, it requires a manual configuration. On the other hand,
smartphones with NFC chips connect with each other by configuring
automatically once they are tapped. This presents a convenient payment solution
that is being touted as the new wallet.
While NFC seems an exciting new proposition, there are several hurdles that it
will have to clear before it becomes an accepted mode of payment.
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3. NFC Enabled Mobile Phones
Firstly, smartphones need to be NFC enabled. At present, worldwide, only around
3.5% of smartphones are NFC enabled, but this scenario is expected to change
drastically. As per statistics from Yankee Group around 7 million NFC enabled
phones were expected to have been shipped worldwide by the end of 2011. This
figure is forecasted to grow to 203 million by 2015, and if this does happen, part
of the infrastructure required for NFC mobile payments will be in place. In Asian
countries such as Japan, China and India, tap and go payments are already
popular, signalling that NFC adoption would also be quick.
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4. Efficient Payment Mechanism
The second aspect required for the success of NFC is that online payment
systems need to be set up so that customers can use NFC for all their payment
transactions from store purchases to parking fees. Several large players in the
sector are in the process of setting up these systems and trials are underway.
Google Wallet, ISIS, Visa Wallet and American Express’ Serve are already in
use, but there are still several issues to be sorted out. For instance, at present,
there isn’t a single payment system that is universally accepted. It will take a
while before this happens as the required infrastructure will have to be set up
worldwide, across stores and other points-of-purchase. The first large scale trial
of NFC will take place at the Commonwealth Games 2012.
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5. Security
There are also issues related to security that need to be addressed. Although
many people use mobile payments, there is a general concern about its security
aspects. Companies will have to put in strong encryption and password
authentication protocols, and customers will have to use password locks, anti-
virus protection and other security software to prevent unauthorised usage of
their NFC enabled device. Once these issues are addressed, NFC payments will
take off.
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6. Comparison
Near
Field
Communica0ons
(NFC)
Payments
–
What
to
Expect
:
Summary
Points
in
favour Points
Against
• Convenience
of
tapping
mobile
to
• Only
3.5%
of
smartphones
are
NFC
make
payments
–
no
need
to
carry
enabled
at
present
wallets
or
credit
cards
• Based
on
RFID
and
can
be
• No
standardised
payment
mechanism
automaIcally
configured
compared
to
although
there
are
several
players
in
Bluetooth,
which
has
to
be
manually
the
market
configured
• Promising
adopIon
figures,
especially
• Issues
related
to
mobile
security
such
in
Asian
countries as
unauthorized
usage
in
case
of
loss
of
phone
or
virus
aMacks,
spyware
and
malware
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7. Summary
While NFC is being adopted in a small scale, its current potential is just the tip of
the iceberg. As per figures from Juniper Research, NFC payments will be
launched in around 20 countries by the end of 2012, and forecasts estimate that
$50 billion worth of NFC transactions will be carried out by 2014. So clearly, the
potential is huge, and once things fall into place, NFC payments will be the new
currency, and it will soon be time to bid farewell to your wallets and credit cards.
At TechAhead, we have helped clients develop apps that support NFC
payments. For more information on how we can help you for your mobile apps
developmentrequirement, write to us at info@techaheadcorp.com for FREE 30
minutes no obligation consultation with our mobile experts($200 Value).
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8. Thank
you
Reach
Us:
www.techaheadcorp.com info@techaheadcorp.com
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