NFC Is Coming -- No, Really, This Time

Google-WalletI can’t say that I look forward to the day when people are waving their handsets in front of inanimate objects. One of the weirder byproducts of mobile technology is that it normalizes behaviors that a decade ago would have been mistaken for mental illness. Talking into thin air without a visible partner would have been considered unbalanced in 1995. In 2011 it is just a guy on a Bluetooth headset.

Likewise, let's not be too anxious for the day when NFC-enabled phones, payment terminals, movie posters, vending machines and parking meters register our presence with a mere wave of the smartphone. The streets could start looking like a dance party at Ken Kesey’s famous Acid Test parties.

IMS Research says that day may be coming sooner rather than later. The company has estimated that the number of Near Field Communications handsets shipped worldwide this year will reach 35 million but will hit 80 million next year. Calling 2011 a “breakthrough year,” IMS says the repeated false starts for NFC phones are behind us now. All of the major hardware vendors are planning on releasing NFC devices this coming year, with the notable exception of Apple.

IMS cites the launch of the Google Wallet platform on one handset over the Sprint network as an encouraging start in the U.S. Overseas, France is actually helping to fund NFC projects in major cities, and Orange says it will have sold half a million NFC phones this year alone. Orange UK also launched a contactless payment program in May. At the 2012 Summer Olympics in London, an Everything everywhere project for attendees will include multiple partners among OEMs, carriers and VISA Europe. 

No doubt the rising comfort with mobile payments will help bolster NFC acceptance. The basic technology and standards for NFC phones actually have been in place for a number of years, but it was a solution still looking for a problem. While NFC has uses outside of the m-payment arena (smart posters, etc.) mobile payments have always been seen as the important catalyst for the technology. But was pulling out one’s credit card really a problem that required a fix?

To some degree, that question still will apply even now. How much added value will consumers get from waving a phone instead of swiping a card? This is a case that the industry still will have to make. All the pieces are here to make the argument. When bolted onto a smartphone, an NFC payment system can be tied into so many other services: coupons, savings, loyalty programs. But unless marketers actually bring these pieces together into a compelling consumer experience, no one will be waving their arms like Merry Pranksters any time soon.

1 comment about "NFC Is Coming -- No, Really, This Time ".
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  1. Dan Smith from Funco, Inc., December 16, 2011 at 2:56 p.m.

    Not only is how much value will consumers have, but what is the value proposition to the merchant, who will need to install yet another POS technology. Is it really worth it?

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