In the happy holiday turmoil you might have missed PayPal President, David Marcus’ blog in which he predicts that the “NFC payments debate will slowly die in 2013.” “Is tapping a phone on a terminal any easier than swiping a credit card?” he asks.
You might think that we would agree wholeheartedly. NFC has been one of the major frustrations of 2012. The great ISIS experiment, based on NFC, was delayed again, possibly through the cultural challenges of large established companies trying to do anything even faintly innovative. And, as David Marcus says, NFC does not actually solve a problem the customer has. Innovation in mobile payments is more about simplicity and security. BillingViews’ Ed Finegold agreed with this sentiment back in October. He wondered whether the real place of mobile in the payments puzzle is in the intelligence it can bring to the problem. If, for instance a store does not accept Amex, a mobile can track, store and sort out which card is the most effective for the transaction. Earlier in the year, we predicted that the iPhone 5 would not include NFC, based on the premise that Apple generally doesn’t include stuff that doesn’t work in its devices.
The point about NFC is that people are missing the point. David Marcus may well be right – that by the end of this year NFC is hardly mentioned in the payments context, but he takes a narrow focus. We seem to have forgotten what NFC actually stands for – Near Field Communication. No ‘P’ for Payments in the acronym. NFC is about the world immediately around you. It will be important in the provision of location based and relevant services – something that David Marcus believes to be an area to watch this year. As long as the industry gets the balance between simplicity, relevance and location right and does not turn customers off by being too intrusive, obvious and irrelevant, NFC will become massive – and invisible.
It will become massive in the same way that IMS did. Several years ago, you could not read a publication without fighting your way through millions of words written in praise of this game changing technology. Every operator I talked to had investment in IMS in their strategic plan, but only a couple knew why. The hype seemed to be driving the investment plans of otherwise sensible people. And once the hype – and the conferences, publications and articles – died down, IMS disappeared. But it is there, lurking in the infrastructure of our lives. The clue, of course, was right there in its name – IP Multimedia Subsystem – hardly a prime time name.
Taking the payments focus, then I would agree with David Marcus, NFC might eventually become one of many payment options and frankly not a very important one. Taken in the wider context, that of delivering a richer all round experience that will catapult our mobile lives to ever cooler and more connected heights, then I beg to disagree – NFC will be everywhere.