Meet The Multi-Billion Dollar Industry Which Wants To Replace Your Wallet With Your Mobile Phone



NFC is one of the most talked about forms of technology at the moment – and that’s really no surprise. In fact, it is expected that NFC will become a multi-billion dollar industry just by existing, with telecoms and e-commerce companies who will adopt the technology expected to immediately reap the rewards from their user base of ‘X’ million subscribers.

So – What exactly is NFC?

NFC stands for Near-Field Communication and refers to a set of short-range wireless technologies which allow the reading of information or data from a device or devices, with the two devices usually requiring a distance of 4cm or less between them.

NFC can be used in three main ways, these include:

Card emulation – An NFC device behaves like an existing contactless card

Reader mode – An NFC device is active and reads a passive RFID tag, for example for interactive advertising

P2P mode – Two NFC devices communicating together and exchanging information

Using any one of the above methods, NFC can be put to good use in a number of sectors of our society. For example, mobile ticketing systems for buses, trains and planes, posters and billboards which would feature “hidden” information and require scanning by the user before they could access said information (QR/RFID codes) and even the possibility of pairing two bluetooth devices together.

But the most talked about and immediate use of this emerging technology is the introduction of a (worldwide?) mobile payments system. In fact, Google, Apple, AT&T, Verzion, T-Mobile, Amazon, Microsoft and others all want a piece of this emerging and lucrative technology – and here’s how they each of them intend to introduce you to it over the next few years.

Google: The search giant may be the farthest along of the big companies. Android already includes NFC support, but most Android phones don’t yet carry NFC chips. This hasn’t deterred Google from running in-store mobile payment tests. More recently, Google reportedly partnered with Mastercard, VeriFone and Citigroup to create an NFC payment system that could launch later this year. It also acquired NFC startup Zetawire last year.

Apple: The iPhone maker is reportedly considering adding NFC to the iPhone 5, though rumors that it would be added to the iPad 2 turned out to be false. From what we’ve heard, Apple has been testing NFC payments on its Cupertino campus for months, but is unsure about whether it should be made available in the next edition of the iPhone.

AT&T, Verizon & T-Mobile: Three of the four major networks teamed up last year to announce Isis, a joint venture between the networks to facilitate the addition of NFC technology into their phones.

Amazon: The ecommerce giant is reportedly exploring the idea of its own mobile payment service to compete with Apple and Google. Amazon already has Amazon Payments, and has popular apps on both iOS and Android, but it doesn’t have an NFC product.

Microsoft: The software giant is also reportedly getting into the mobile payments game. It hopes to get NFC into its OS this year, which would be a huge boost to its Nokia partnership. Nokia is already committed to NFC, and its reach could instantly make Microsoft a major player.

Others: When talking about payments, you can’t forget PayPal, which has partnered with startup Bling Nation to add NFC-enabled stickers to people’s phones. Boku is another company to watch.

Focusing on Apple – and evidence is stacking up that the company fully intends to bring this technology to the iPhone in the near future. At first it was thought that this “near future” meant iPhone 5, Apple’s next iPhone iteration expected this fall. However, in recent weeks a number of reports have surfaced pointing to iPhone 6, set for introduction, summer 2012.

If Apple does intend to bring NFC to the iPhone the next obvious question would be – Who’s the gatekeeper? … Who will be the (governing?) body who will manage your mobile transactions and security effectively? – Apple isn’t a bank, and I imagine at heart it never wants to be. Perhaps then, this NFC system will link your iPhone directly to your Bank account, just like iTunes.

That’s great and all, but then I find myself returning to the question of security – if your mobile phone becomes your bank card, do stolen mobile phones equal drained bank accounts? — the other, more likely, option is that Apple would link its NFC-enabled payment system to bill your iTunes account. In either instance, it is unlikely Apple wouldn’t implement a system like this without fully testing or providing the necessary security.

However much I think of the concept of NFC being linked to mobile phones like the iPhone though, I always go back to the idea that, usually, your bank card is tucked away in your inside pocket, after all it’s just a card – it serves no further purpose other than allowing you to make payments safely and securely. Your mobile phone is, I imagine, a different story.

Perhaps though Apple has no intention of linking your iPhone to your bank or any other payment system? – If this report by CoM a few days ago is anything to go by, maybe Apple intends to use NFC not for payments but instead to extend remote computing capabilities for its mobile operating system, iOS? – These remain unanswered questions at this point.

One thing is for sure — NFC is coming and may one day replace the way we interact, make every day transactions and make personal and secure data transfers.

What are your thoughts on NFC coming to mobile phones (such as the iPhone)? – Leave a comment below.

[via Mashable]