NFC Will Be the Killer App for 2011
By David Dorf on Nov 29, 2010
As a former smartcard engineer, I've seen many different electronic payment schemes come and go. Payment technology is saddled with the "chicken or egg" problem. That is, you can't justify the expense of the infrastructure without a critical mass of consumers, and the consumers won't bother unless they know the new method will be around for a long time. For this reason, most emerging payment techniques remain in campus settings (e.g. universities, corporate campuses, sporting arenas) and fail to go mainstream.But the momentum behind mobile commerce is about to introduce us to NFC, a short-range contactless technology that's been waiting for the right moment to pounce. With NFC-enabled phones, consumers will be able to quickly and easily communicate with retailers to accept marketing offers, pay for goods, and receive loyalty points.
The following news stories illustrate that momentum:
- April 2010, Apple files patents for iPay, iBuy and iCoupons that include the use of NFC.
- May 2010, The French government-backed NFC trials in Nice commence as a dry-run for a planned national rollout. The trial involves four mobile operators, two banks, and the city's transit system.
- June 2010, Nokia spokesperson Anssi Vanjoki announces (and later clarifies) that Nokia will begin including NFC technology in some of its phones starting in 2011.
- August 2010, Apple hires NFC expert Benjamin Vigier and continues filing patents for mobile payments, including the use of NFC.
- November 2010, Google CEO Eric Schmidt announced Android "Gingerbread" 2.3 will support NFC.
- November 2010, AT&T, T-Mobile, and Verizon Wireless announce joint venture to build national mobile commerce network using NFC-enabled phones. The Isis™ mobile wallet will eliminate the need to carry cash, credit and debit cards, reward cards, coupons, tickets and transit passes, fundamentally changing how you shop, pay and save. All with your phone.
Retailers would be wise to begin looking at what it takes to add an NFC reader to their POS. Oracle Retail will be demonstrating integration with the VivoTech NFC reader at the NRF Big Show in January. Stop by the booth and see.