By Mashable/Mobile
The day when near field communication (NFC) will help replace plastic credit cards, coupons and loyalty program cards with a wave of a phone at a payment terminal has been long anticipated.
Wireless NFC technology enables devices, including mobile phones and payment terminals, to communicate with one another or read special tags. Its short-range signal, convenience and built-in security make NFC an apt choice for mobile payments. Its efficacy persuaded companies like MasterCard, American Express, and Visa to join the NFC Forum in 2004 shortly after it was founded to advance the use of the technology. Today, the possibility that this technology could replace a wallet full of plastic seems not only likely, but imminent.
Samsung’s Nexus S, the first NFC-enabled Android phone, will be on sale at Best Buy starting December 16; Nokia has announced that all of its Smartphones starting in 2011 will support NFC; and Apple recently hired an NFC expert. Jeff Miles, the director of mobile transactions worldwide at NXP Semiconductors, which co-invented NFC with Sony in 2002, says he expects more than 70 million NFC-capable handsets to be manufactured in 2011.
“As far as what will happen with it, who owns the keys and all of that, none of that has really been determined,” Miles says.
Players in multiple industries have made strides toward putting virtual wallets on consumers’ mobile phones. Here’s how some of them have been approaching the opportunity to transform the way we make purchases.
Credit Card Companies
Contactless payment terminals for MasterCard’s PayPass, American Express’s ExpressPay and Visa’s payWave could also be used to accept the tap of an NFC-enabled phone for payment. In essence, the terminals, which are installed in all U.S. McDonald’s, CVS Pharmacies, Home Depots and other merchant locations, are the beginning of a “tap-to-pay” infrastructure.
MasterCard, for instance, is now accepted on about 265,000 contactless payment terminals that would also be able to accept an NFC-enabled phone. Considering that the company has about 29 million locations worldwide, this is far from a complete infrastructure. But it’s a start.
“Definitely we’re seeing a lot of interest and support, and I think 2011 is really going to be a year when we really start seeing commercial deployment,” says James Anderson, head of mobile for the company.
Although NFC-enabled devices have been available in various markets for quite some time, with the exception of a handful of pilot projects, they haven’t been used for payment. In order to safely use the technology with checkout terminals, a “secure component” also needs to be either embedded in the phone, in a SIM card, or through MicroSD cards.
Visa recently made mobile contactless payments available using a MicroSD card solution that can be inserted into the phone’s existing memory slot. Wells Fargo announced this month that it would launch a pilot of the payment option with 200 of its San Francisco employees.
In the meantime, credit card companies have started programs to get customers used to the idea of tapping their phones to pay. MasterCard customers that bank with Citibank, for example, can ask for a mobile PayPass tag to attach to their phone to enable tap-and-pay. The adhesive chips use the same NFC technology that would be embedded in some phones.
The day when near field communication (NFC) will help replace plastic credit cards, coupons and loyalty program cards with a wave of a phone at a payment terminal has been long anticipated.
Wireless NFC technology enables devices, including mobile phones and payment terminals, to communicate with one another or read special tags. Its short-range signal, convenience and built-in security make NFC an apt choice for mobile payments. Its efficacy persuaded companies like MasterCard, American Express, and Visa to join the NFC Forum in 2004 shortly after it was founded to advance the use of the technology. Today, the possibility that this technology could replace a wallet full of plastic seems not only likely, but imminent.
Samsung’s Nexus S, the first NFC-enabled Android phone, will be on sale at Best Buy starting December 16; Nokia has announced that all of its Smartphones starting in 2011 will support NFC; and Apple recently hired an NFC expert. Jeff Miles, the director of mobile transactions worldwide at NXP Semiconductors, which co-invented NFC with Sony in 2002, says he expects more than 70 million NFC-capable handsets to be manufactured in 2011.
“As far as what will happen with it, who owns the keys and all of that, none of that has really been determined,” Miles says.
Players in multiple industries have made strides toward putting virtual wallets on consumers’ mobile phones. Here’s how some of them have been approaching the opportunity to transform the way we make purchases.
Credit Card Companies
Contactless payment terminals for MasterCard’s PayPass, American Express’s ExpressPay and Visa’s payWave could also be used to accept the tap of an NFC-enabled phone for payment. In essence, the terminals, which are installed in all U.S. McDonald’s, CVS Pharmacies, Home Depots and other merchant locations, are the beginning of a “tap-to-pay” infrastructure.
MasterCard, for instance, is now accepted on about 265,000 contactless payment terminals that would also be able to accept an NFC-enabled phone. Considering that the company has about 29 million locations worldwide, this is far from a complete infrastructure. But it’s a start.
“Definitely we’re seeing a lot of interest and support, and I think 2011 is really going to be a year when we really start seeing commercial deployment,” says James Anderson, head of mobile for the company.
Although NFC-enabled devices have been available in various markets for quite some time, with the exception of a handful of pilot projects, they haven’t been used for payment. In order to safely use the technology with checkout terminals, a “secure component” also needs to be either embedded in the phone, in a SIM card, or through MicroSD cards.
Visa recently made mobile contactless payments available using a MicroSD card solution that can be inserted into the phone’s existing memory slot. Wells Fargo announced this month that it would launch a pilot of the payment option with 200 of its San Francisco employees.
In the meantime, credit card companies have started programs to get customers used to the idea of tapping their phones to pay. MasterCard customers that bank with Citibank, for example, can ask for a mobile PayPass tag to attach to their phone to enable tap-and-pay. The adhesive chips use the same NFC technology that would be embedded in some phones.
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