NFC, we hardly knew you. It was just a year ago when Near Field Communication seemed the clear winner in the battle for pole position in the looming mobile payments slugfest and many credit unions were grappling with how to include NFC in their digital strategies.
The idea then was that, soon, most smartphones would ship with NFC built in and as merchants upgrade their point-of-sale terminals to meet the 2015 EMV chip and PIN requirements, NFC would slide in and, presto, we'd all be buying newspapers and burgers with a tap of a phone.
And then Apple shipped the iPhone 5 without NFC – and with no revealed roadmap to get Cupertino to NFC – and all hopes seemingly were crushed. Fact: many, many millions – upwards of 10 million – iPhone 5s will sell in the US before yearend and those buyers will be locked into two-year contracts that preclude them from embracing NFC
But not so fast to bury NFC. That's the word from numerous experts whose optimism persists despite yet another delay of the Isis trials of NFC in two cities which had been scheduled for the summer but now won't happen. Isis is an effort of AT&T, Verizon, and T-Mobile as well as several large banks and, so far, it has made considerable noise but accomplished nothing whatsoever.
Apple may be boycotting NFC, Isis is sputtering, but then there are the positives. For instance: BlackBerry maker RIM is embracing the technology. Granted, BlackBerry has been lagging in the marketplace – no argument there – but the Canadian company has drawn a line where it sees NFC as a differentiator.
The Bold and Curve families of BlackBerries both ship with NFC and NFC is in the specs for the next generation BlackBerry 10 device, due out early in 2013.
Geoff MacGillivray, senior product manager for NFC at RIM, said in an interview that although the focus had been on NFC as a payments technology, “we will see it in a wide variety of use cases.” For instance: at the RIM campus in Waterloo, Ontario, MacGillivray said he uses an NFC-equipped BlackBerry in lieu of an employee ID badge to gain entry to company buildings.
He added that he also frequently uses it to wirelessly pair devices to exchange business card data and also to transfer photos and files.
“As more services roll out, consumers will find NFC more valuable,” he said.
The question is, how far are we from an NFC tipping point? “I feel NFC is approaching a tipping point. It's not quite where every other person has NFC. Give it another year and a tremendous number of people will have devices with NFC,” said Andrew Till, chief technology officer at Symphony Teleca, a company that focuses on next gen mobile technologies.
Till elaborated that, in addition to RIM, Nokia, Sony, the Google Galaxy Nexus, some HTC phones, some Motorola phones, and many others are now shipping with NFC. Even with Apple staying on the sidelines, a critical mass of NFC equipped phones just may be coming together.
Haridas Nair, a vice president at Sybase 365, added: “People are looking for an overnight revolution. That is not what is happening. What we are seeing is a slow evolution.”
Complexity around divvying up proceeds involved in payments is a big part of the delay in adoption of NFC as a payments technology. “Everybody has to be paid – the telco, the handset maker, the card processor, the merchant. Sorting that out isn't easy,” Nair added. “This complexity is causing some of the inertia.”
At the same time, more companies are playing with using NFC as a tool for enabling beefed-up loyalty and rewards programs and for highly targeted mobile couponing. Somewhere in there, NFC may also gain traction as a payments tool – Google at least seems committed to its Wallet which is NFC based, and the power of that company is difficult to ignore.
Either way, more people continue to find more uses for NFC, even without Apple's joining in. And that means credit unions need to continue to look for ways to integrate it into their plans.
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