Mobile Payments Getting Ready for Prime Time

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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.

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2 comments on "Mobile Payments Getting Ready for Prime Time".

1. Bryan Bielefeldt from Response Marketing
   

   commented on: February 22, 2013 at 9:36 a.m.
   I couldn't agree more: the growth potential that NFC will have on POS/POP is incredible to think about, not only with payment but also with the potential to interact with the consumer as they are shopping. A conversation I had yesterday with one of our managing partners at Response Marketing touched on the idea that most consumers are more likely to go to their mobile device to get information about a product before they engage a salesperson. That said, I think that the potential to engage the consumer with "low touch" mobile information before they walk away could dramatically increase the conversion rate in-store, bridging the gap between e-commerce and in-store even further.
2. Chuck Martin from Chuck Martin
   

   commented on: February 22, 2013 at 9:47 a.m.
   Agree Bryan, the opportunity for new forms of 'proximity marketing' and the ability to easily and quickly send additional info to the in-store shopper could be huge.

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