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The Future is called Near Field Communication and it’s here, it’s growing in availability and it will change the way you pay for things.
So what is NFC? Well interestingly enough it has it’s roots no where near mobile payments.
Near field communication (NFC) is a set of standards for smartphones and similar devices to establish radio communication with each other by touching them together or bringing them into close proximity, usually no more than a few centimetres. Present and anticipated applications include contactless transactions, data exchange, and simplified setup of more complex communications such as Wi-Fi. Communication is also possible between an NFC device and an unpowered NFC chip, called a “tag”
As this Wikipedia excert indicates NFC was designed as a short distance communications protocol for mobile devices to be able to communicate simple. By Simply tapping phones together they can transfer data between each other.
This simplicity of use however didn’t go unmissed by the people who want to make spending your money as easy as possible.
NFC devices can be used in contactless payment systems, similar to those currently used in credit cardsand electronic ticket smartcards, and allow mobile payment to replace or supplement these systems. For example, Google Wallet allows consumers to store credit card and store loyalty card information in a virtual wallet and then use an NFC-enabled device at terminals that also accept MasterCard PayPasstransactions.
Google have been very active in this system and takes the concept of you entering the details of the debit, store and loyalty cards you have in your wallet and storing them on your Android phone in it’s digital Wallet. then taking the this information payments can be made by tapping the phone on a merchants NFC reader.
The details are supposed to only be available from the Google Wallet application however An analysis by security company viaForensics revealed that some card information stored by Google Wallet is still accessible outside of the application. It is suggested that hackers could create a way to intercept data by eavesdropping on Google Analytics, which monitors apps used on the Android OS. A previous analysis by the same firm revealed a number of other exploits that have since been fixed.
This is one of several issues NFC is having and seemingly slowing the mass takeup of the technology, security issues are important to address, the lack of places which although growing in the UK at least is still tiny.
Google Wallet isn’t the only system which uses NFC both Visa and Mastercard have systems and the technology built into newer credit cards. However it’s been very slow to take off..
A Good example of why comes from this quote from Anuj Nayar
“History has shown that unless a new technology saves people time or money, it won’t reach mass adoption,” he said. “NFC is a technology in search of a problem. Tapping a phone against a reader is no faster than swiping a credit card. In fact, it can take longer.
A year after Google Wallet its still only on a handful of phones and the technology itself seems to be going nowhere, the public have concerns about using a device which in the most part has a battery life which doesn’t last a whole day to be the sole reason for making payments or entering the underground. Also getting your new Samsung Galaxy S3 or iPhone out in some trans stations is just a walking advertisement to have your phone nicked.
Now we have Apple in IOS6 introducing Passbook which unlike Google Wallet in it’s first pass round the block at least isn’t going down the NFC route instead is focusing on those paper items in your pocket like Boarding Passes, Vouchers and Tickets.
Apple doesn’t need to be straight out of the blocks with NFC, what it does however need to do is get people used to keeping their paper life on their mobile device, set the habit in motion, this allows the technology be it NFC or an Alternative gain traction and once it does Apple can step in to the fray at that point.
Trusting a mobile device with something important like payments is a huge question to ask, and a major change. As the introduction of chip and pin showed these types of things do take time. We are as a culture getting used to our life being on our mobile. Paying for things with a tap however is going to take a major improvement in technology and vendor trust.