There was a time when a phone was just a phone. What a quaint idea in a day when this ubiquitous device emerges increasingly as the Swiss Army knife of modern living.
Near Field Communications (NFC) is the latest buzzing telephony concept to capture our collective imagination. And with rumours swirling about Microsoft possibly adding NFC capability to Windows phones so it might give Google’s lead in handset software (its Nexus S is already NFC-enabled) a run for its money, the buzz is louder than ever.
NFC is an emerging technology that lets mobile phone users send payments by phone directly from their bank accounts to NFC-equipped terminals. A phone set up with this contactless technology can share and access data over short ranges. It enables people to make transactions with a simple tap of the phone within two or so inches of an NFC point-of-sale reader.
With this technology, cellphones are reinvented as programmable smart cards, essentially relegating old-fashioned credit cards to a heap of dinosaur bones.
Yes, fragile market conditions and the imperative to upgrade the current install base of legacy credit card machines have hampered adoption rates somewhat. But a growing number of companies is recognizing the potential of this game-changing technology and claiming a berth aboard the NFC bandwagon.
Here are eight reasons why you should care.
1. In addition to debit/credit card payments, a range of other applications sits poised on the NFC horizon, including accessing information from RFID tags on billboards, mobile ticketing and keyless door entry.
2. NFC is said to be compatible with hundreds of millions of contactless cards and readers already deployed worldwide.
3. Those with an eye on the scene predict that widespread NFC use will be a reality in the next 1-2 years.
4. Cellphone users in Japan have been using their phones to make contactless payments since 2004.
5. Gartner predicts a 2014 business environment in which mobile payments may account for $245-billion in transactions, up from $32-billion last year.
6. Leaders in the public transit systems of Washington, DC and Vancouver are investigating NFC payment systems.
7. A recent announcement by Samsung and Visa — a partnership to be rolled out at the 2012 Olympics in London which will allow attendees to buy items on the go — represents a significant development for NFC. Samsung’s phones will be decked out with the technology; Visa will provide the mobile app; and users will be able to make NFC-facilitated purchases from those locations where Visa’s mobile contactless payments are accepted.
8.The NFC Forum, the nonprofit group formed in 2004 to promote the technology, reports the addition of new members regularly, including Daimler, Hitachi and new principal member, Google. Google’s Nexus S is equipped with NFC chips, and the company has made noises about rolling out tests of so-called “wave-and-pay systems” at NYC and San Francisco retailers in partnership with VeriFone Systems and ViVOtech. The Wall Street Journal recently reported that Google has also paired up with MasterCard and Citigroup on this front.