NFC – Not For Commerce?

eBay Chief Executive John Donahoe recently claimed that NFC stands for “Not for Commerce”, when discussing Near Field Communication being used to turn cell phones into mobile wallets. At Mobile World Congress, Russell Buckley said something along the same lines.

Apple has not yet backed the technology as many were expecting, but many of the largest US carriers and credit card companies have embraced the innovation as a way of showcasing their ambition. As we learned from our Contactless Challenge, one reason it’s not yet a mainstream method of payment is that merchants have been reluctant to spend money to upgrade their checkout terminals, until NFC is more widely adopted. This makes it a classic chicken & egg situation.

We also discovered that several big brands had integrated contactless payment terminals, but when it came to going ‘truly contactless’, smaller merchants were a long way behind. It’s clear that NFC adoption will be led by names like Pret-A-Manger, who revealed recently that their contactless payment revenue in the UK boomed over the past 12 months.

In the U.S., ISIS, the mobile wallet joint venture between Verizon Wireless, AT&T and T-Mobile USA, switched on its NFC payments and offers service in October last year and reports suggest pilots are doing very well, with active users using the wallet five or more times a week.

Despite all the positive vibes that came from the Smart Card Alliance Payments Summit last month, Apple remains a key player in the adoption of NFC payment transactions. Understandably, any snub on innovation by a company the size of Apple will affect adoption. However, as Apple’s Passbook app would suggest, there is a market (it is acknowledging) for loyalty cards, tickets and marketing coupons on a mobile device. NFC will help extend the range of possibilities in this space.

It’s evident to me that there is an appetite for simple, effective use of NFC in services like the POPWings business cards on display at MWC13, available in 190 countries, which speed up digital lives. The uses of NFC technology stretch far beyond payments. Where have you seen it?