Evan Schuman's StorefrontBacktalk

More precisely, it misses why NFC has fared so extremely poorly in the U.S., especially for payment. The comparison of technologies—be it Light Field Communication (LFC) or using the touch-screen of a phone such as is being done by TouchBase—to NFC usually implies that if NFC phones were more plentiful or if the POS interface was simpler or if the phone connection was faster, then NFC would have flourished. The reality, though, is that while those tech issues are true and were obstacles, tech problems weren't anywhere close to NFC's biggest headache. It has always been the business issues—and none of today's much-touted approaches seem to have a solution for that.Read more...

"NFC was revolutionary 10 years ago but I think it just might have passed its sell-by date," Lyndon Lee (Tesco Enterprise Consultant Architect) told attendees at a mobile payments conference in London this week, according to a report in NFC World. "Is mobile NFC at the right place, at the right time? I don't see any real movement or activity. NFC usability is not really revolutionary and, for the general public, is it really that cool? I think the next generation won't think it's cool enough for them and they won't use it. Mobile NFC is unappealing."Read more...

If paying with a mobile phone isn’t any easier than just using a card in-store, maybe it can at least improve the mobile-commerce buying process. That seems to be the idea behind a trial MasterCard announced on Wednesday (Nov. 7). In the Netherlands-based test (which actually began in mid-October and runs through March 2013), an NFC-equipped phone can be used to make M-Commerce purchases, with the phone sending an EMV-compliant cryptogram to complete the transaction after the customer selects a payment card and keys in a PIN. In effect, it’s Chip-and-PIN over the phone.

That’s slightly easier for customers than having to key in the whole card number and slightly safer than the merchant storing the number. But the real value to retailers will show up if MasterCard declares that its own EMV solution qualifies M-Commerce transactions for card-present interchange rates (or at least for the EMV-based liability shift). In that case, online merchants may suddenly be very interested in offering customers that option. If not—well, there’s always room for yet another NFC payments approach that retailers have no reason to adopt, right?…

As the owner of brands Kraft, Maxwell House, Oscar Mayer, Nabisco, Planters and JELL-O discovered, NFC was the winner. NFC's engagement level was a dozen times greater than QR codes, and engagement time was 48 seconds for NFC compared with 5–10 seconds for QR. But NFC excludes many older phones and—crucially—all Apple iPhones and iPads. For many reasons, that's a dangerous segment to ignore.Read more...

Now imagine the same idea used in-store: A customer walks in, taps her phone against a pedestal-style kiosk and is automatically connected to the chain's CRM system via a secure Wi-Fi network. After that, everything she does in-store is CRM gravy.Read more...

Oh, and Donahoe not only believes that NFC will never be adopted by large chains, but he has a specific prediction of when that adoption will happen—just in case he's wrong. And, no, we're not making any of this up.Read more...

The key to making phones more secure was supposed to be that a required PIN would prevent the NFC chip from being turned on most of the time, and the chip would be powered down quickly after a transaction when the screen went dark. That's certainly the way Google Wallet was designed for Android phones. But according to most of the reviews of Google Wallet, all that PIN-punching is a pain, and the phone's screen quickly going dark is annoying. Guess how secure that makes the NFC chip?Read more...

Not unlike IBM in the 80s and 90s, Apple is in the highly enviable position that it can wait until it's time and then still dominate the market when it makes the move. Indeed, it might even be easier and more effective to do it that way. But that strategy will also determine who will define the retail NFC standards that matter—the ones on the checkout counter and in the retailer's datacenter. And that won't be Apple.Read more...

"I was with a large merchant last week who described NFC as Not For Commerce," Donahoe said during a quarterly earnings call. That is "simply because when you're a large merchant and you have 500 stores and 14 checkout lanes per store, you want zero friction at checkout and point of sale. And they're not going to allow anything that has friction. No proprietary systems." Beyond proprietary hardware and software, the lack of industry standards will also be a big help to PayPal, he said.Read more...

A major Australian bank has declared its mobile-payments trial a failure. ANZ Banking Group and Visa launched the trial in March, with 50 bank employees in Sydney and Melbourne using mobile-phone covers that added near-field communication (NFC) by way of a MicroSD card. The trial ended in April, but on Monday (June 27) the bank delivered the verdict: “Our participants strongly supported contactless payment as a convenient way to pay, but the MicroSD technology did not meet all of our requirements. At this stage, we will not be progressing with MicroSD as a contactless payment technology platform,” the bank told ZDNet Australia.

A bank admitting its NFC trial has failed—especially when it involves Visa’s pet project, MicroSD cards? That would have been unthinkable even six months ago. NFC-in-MicroSD was the way for Visa and the banks to keep interchange fees out of the hands of phone makers (which control NFC-in-the-phone) or mobile operators (with NFC-in-the-SIM). But now, a month into the Google Wallet era, that’s unnecessary: Visa and the banks will get interchange no matter where the NFC chip sits. Now maybe everyone can stop playing “hide the NFC” and focus on actually getting customers to use it.…

The key question: Why will consumers be more open to this Google NFC effort than they have been with contactless payment? Presumably, Google and the retailers will be smart enough to flood consumers in the selected cities—New York, San Francisco, Los Angeles, Chicago and Washington, D.C., according to Bloomberg—with seriously generous discount coupons to give them a compelling reason to change their buying behavior and try NFC. Some have argued that the trick of making NFC work will not be in a strengths/weaknesses battle with rectangular pieces of plastic, but in the power of the mobile phone to be comprehensive.Read more...

The real difference in time—and there truly is one—has nothing to do with IT, authentication or any other technological issue. It's the practical reality that shoppers tend to keep credit and debit cards buried deep within their wallet/pocketbook, whereas they tend to either have their mobile phone in their hand or in a convenient outer pocket, easily within Bluetooth range. That extends the debate from whether a swipe or a wave is faster to whether the entire mobile payment process is easier and faster because of how people use mobile phones.Read more...

"The carriers know something about you. They authenticate you, and it's reasonably difficult to falsify or spoof that authentication. If you're holding that device, there's a pretty darn good chance that you are who you say you are, as you've authenticated with the mobile network," said Sajor, who was recently promoted to CIO from Chief Technology Officer. "Wouldn't it be interesting, wouldn't it be nice to use that authentication to authenticate you for your mobile experience all the way through the entire mobile payment channel? That would take away the logins and all of that kind of thing. You'd probably want to have some secondary protection: PINs or whatever. But if you could actually use that authentication in a sensible way to seamlessly permeate the entire experience, now you get a much more holistic experience based on what the carrier already knows. The data is already there. We just have to be able to get to it. I don't think we're quite at that point yet." But Pizza Hut's CIO urges caution until the U.S. cleans up mobile standards.Read more...

Let's not overlook the tons of wonderful capabilities native NFC on popular handsets could offer retail by getting fixated on one—mobile payment—that has quite a few other challenges.Read more...

The real danger here, he writes, is that the larger NFC value proposition might be poisoned if NFC is pigeonholed as just another card replacement. If that happens, it would effectively kill retailer and consumer adoption.Read more...

Arguably the biggest stumbling block for the acceptance of any of the mobile-device-to-barcode/tag efforts (Near-Field Communication [NFC], 2D barcodes, Microsoft’s Tag Reader) has been the shortage of any phone manufacturers shipping units with any of these capabilities natively. Nokia has now become the first manufacturer to agree to include NFC chips in its phones, as of next year.

A report in PaymentsSource has Nokia saying that the phones will support the Single Wire Protocol and MicroSD cards. “With the Single Wire Protocol, a wire connects the NFC chip to a mobile phone’s SIM card, which is used to identify a subscriber on the carrier’s network. MicroSD is a memory card used in mobile phones and digital cameras,” the piece said. Nokia has been using the chipped-phones in some aggressive trials in India, but shipping all phones with it is a key move. The story also pointed to an unmet expectation that Apple might have been the first to ship NFC-ready phones. “Many observers had speculated Apple’s new iPhone would contain an NFC chip, but that was not the case when it was revealed June 7. It was a mild surprise because Apple had been filing patents for different NFC uses, including using an NFC-enabled phone to interact with an ATM.”…

The Nokia 6212 used in the trial has a list price of $240; trial participants paid $110. But if the consumers made 12 purchases, they got to keep the phone for free. With six purchases, the phone's cost dropped to $55. Some 86 percent of participants made more than 12 purchases and, therefore, got the phones for free. The report dubbed the 18 percent who made exactly 12 transactions "gamers, customers who want to participate at exactly no cost to themselves."Read more...

The four-month-long trial that began in November is significantly limited in scope, involving only BlackBerry devices. And it doesn't even involve BlackBerries with payment chips installed. Instead, the effort involves NFC payment chip stickers attached to the backs of the smartphones.Read more...

A couple of years ago, Near Field Communication was seen in some influential corners—such as at consumer goods giant Procter & Gamble—as the ultimate victor in the fight between NFC and 2D barcodes. Many saw NFC as the better technology, with 2D barcodes being used as a placeholder until NFC was ready. But in the last couple of years, neither technology has gotten very far in the U.S. Few phone manufacturers included the feature and even fewer developers tried to design for it.Read more...

The use of NFC technology for mobile payments will hit $8 billion globally this year and will exceed $30 billion by 2012, according to Juniper Research. The researchers said the world’s first NFC devices will be sold commercially later this year by Nokia “and the market will ramp up (starting) 2011.”

Juniper said payments using NFC or Sony’s FeliCa RFID technology, already commonplace in Japan, will be in the midst of a substantial growth spurt in North America and Western Europe by 2014. Juniper analyst Howard Wilcox is quoted in RFID Update saying “the clear readout from industry analysis is that NFC is going to be a default feature of phones in the future, much like Bluetooth is now.”…

Disneyland Paris is planning to test contactless payments with cards and near field communication (NFC) phones this fall and, unlike so many others that have dabbled in these trials, it is offering discounts and loaning phones to boost participation. We’ve asserted people won’t bother with contactless payments unless they get a benefit beyond the questionable convenience usually touted by those pushing it. Only a handful of retailers, including Dairy Queen, have dangled carrots, such as discounts, to push contactless.

According to a report in Near Field Communications World, the resort is offering 25 percent discounts at Disneyland shops and 20 percent discounts at restaurants to patrons who use their NFC phones or contactless cards to make payments in the shops and restaurants. The trial, set to begin in October, will be available to those with annual passes to the resort who also have accounts in the Paris area branches of two French banks. Prospective users must first fill-out online applications. The people wishing to try NFC will be issued an NFC phone that must be returned when the trial concludes. This also addresses—or, more precisely, sidesteps—concerns about hardware differences with NFC devices. By handing out the phones, Disney is guaranteeing that hardware differences won’t impact their trial results.…

That's the deal being offered by Citibank Singapore, Visa payWave and mobile network M1 as part of a 3-month pilot program in Singapore. For the trial, which involves as many as 300 people, the companies are allowing participants to keep the Visa payWave-equipped Nokia 6212 Classic handsets if they make at least eight transactions with the phones each month.Read more...

Payments for taxis, parking and movies may prove less patient in waiting for new technologies than E-Commerce, a move that could be a bad sign for once-promising mobile payment method Near Field Communication (NFC), according to a new report on Tuesday (Dec. 9) from ABI Research.

With a headline “NFC No Answer for Mobile Payments,” ABI reported that “once, NFC was the leading contender among technologies that could enable mobile payments. But NFC has developed more slowly than anticipated and will not offer viable large-scale mobile payment solutions for at least six years.” That will open the door for SMS, mobile Internet and downloadable mobile applications, the research firm wrote. We should add that 2-D barcode was once seen as a placeholder for NFC, but unexciting trial performance for 2-D has increased support for alternative alternatives.…

MasterCard’s PayPass is ramping up its mobile program with an over-the-air provisioning service to supposedly make it easier for consumers to personalize their payment data on their mobile devices.

As long as a consumer has a phone using Near Field Communications (NFC), MasterCard says the program should work. “First, the PayPass application is securely transferred onto a secure area of the consumer’s mobile phone via the mobile network. Next, the PayPass application is personalized with the consumer’s individual payment account details,” a MasterCard statement said.…

MasterCard Canada this summer will start a 4-month NFC-phone trial, with the backing of some of Canada’s largest retailers, including Loblaw, Petro Canada, Tim Hortons’, Pioneer Petroleum, Rabba Foods, a major NHL arena and McDonalds.

One unusual aspect of the trial is that it will eventually support more than one payment card on each phone, said MasterCard Canada’s Nagesh Devata.…