Mobile Payments Getting Ready for Prime Time
It looks like NFC will play a significant role in this year’s annual Mobile World Congress in Barcelona.
Google will be there promoting its mobile wallet and the organization behind the event is deploying it at 20,000 checkpoints and in taxis in the area so attendees with NCF-enabled phones can pay on the fly.
But NFC (Near-Field Communication) is still really at the starting gate when it comes to mobile payments. Aside from the technology not yet included in most mobile phones, notably all those from Apple, two distinct markets haven’t fully resolved what to do with it.
On the industry side, credit card companies and banks obviously have a large vested interest in NFC for payments. To that end, Visa will be running conference events relating to building the ecosystem for NFC services and MasterCard will be running events relating to payments.
MasterCard’s executive of mobile, Mung Ki Woo, recently suggested to me the likely scenario for NFC payments is that the number of transactions will increase due to the growing number of people with mobile phones who have never had a credit card.
On the consumer side, people are starting to see potential uses of NFC-enabled phones for non-payment activities. A movie launch in London and New York recently used NFC in posters so passersby could get a quick video and the phone company consortium Isis is now conducting a relatively small trial of mobile payments in Austin and Salt Lake City.
The current approach of Visa, MasterCard and others involved is to educate the mobile industry to build awareness as well as all the connecting platforms needed to make NFC work at scale.
To appeal to consumers, that industry will have to show that making payments are either valuable or as easy, if not easier, than with a trusty old credit card, a steep hill indeed.
More likely, NFC will initially be used for activities outside of mobile payments, such as bumping phones to exchange information, getting transportation information at transit stations and checking in. The transaction itself will be driven by the value sent and received.
The physical behaviors of using phones interactively – by physically bumping or swiping them – could be the initial runway for mobile payments to take off.