NFC-enabled mobile payments from Google and Isis are getting attention, while cloud-based payments offered by the likes of PayPal also appear to be picking up steam. So what are the pros and cons of each service? Well, to start with, remote (PayPal) and proximity (ISIS) payments are not addressing the same needs – PayPal primarily addresses online merchants, while proximity based NFC payments are targeted at local merchants. There’s no denying they both have their backers, but one of the key factors when it comes to early adoption is undoubtedly ease of use. In my opinion, it doesn’t get much easier than NFC.
Google’s NFC-enabled mobile wallet took a hit after security flaws were detected in the app that made users’ information vulnerable. Some now argue this plays in favour of cloud-based solutions. So what are the chief issues with NFC? Are they limited to Google’s approach — or common to all NFC solutions? Our mobile NFC payment solution brings banking grade security with PIN stored locally in Secure Element and encrypted UI. We now have mobile NFC solutions that are as secure as any banking cards. Cloud-based solutions simply don’t match merchants’ need for quick, convenient and secure proximity payment.
Some companies are getting excited about proximity marketing in a retail environment. What is the relationship between LBS and NFC, and how can this impact retailers’ ability to engage with consumers though mobile vouchers and coupons? MNOs and OTTs have already started fighting for the control of the NFC wallet with virtual card containers. From here they can offer special deals, loyalty programs or coupons according to user preferences. I think consumers will opt for LBS based marketing that will trigger the download of NFC coupons in a phone wallet. The coupon could then be downloaded into the phone and redeemed when presenting the phone at the point of sale.
Proximity payments, where the consumer needs to connect with a reader, are also poised for growth. Are some, such as Gary Schwartz (who argues this in his guest column at MobileGroove), correct in assuming NFC is more or less interchangeable with Bluetooth and RFID? Or is this an oversimplification of what is required? NFC brings convenience when performing a transaction that Bluetooth cannot offer because it requires two devices to connect to each other before transmitting data. I can’t imagine consumers trying to pair their smartphone with the POS before being able to pay. NFC is a variant of RFID proximity, so yes; it’s interchangeable in this respect.
Ultimately, these are all very valuable points to raise, especially when faced with some of the scepticism there has been surrounding NFC technology. However, considering our answers to the questions Peggy Anne Salz posed, we hope that NFC technology will be more widely accepted. If you’re still doubtful, come along and try it out at our demo stand in Hall 8 at Mobile World Congress.