eBay’s Love-Hate Relationship With NFC

Written by Evan Schuman
April 25th, 2012

eBay CEO John Donahoe, the man who popularized NFC standing for Not For Commerce, seems to have developed a love-hate relationship with near-field communication. He hates NFC and firmly believes it will never be adopted by large retailers, unless it is adopted by large retailers—in which case, he’ll love it.

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.

First, the history. In July 2011, the eBay chief predicted that NFC would go nowhere with large chains, 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.”

On April 18, during an earnings call with analysts, he doubled down that NFC won’t go anywhere with large chains. But Donahoe then oddly enough ended his answer with a reversal, saying that in “at least a couple of years” the industry will “see widespread adoption of NFC in large retailers all over the world.”

Let’s now introduce the second part of Donahoe’s answer to the first part of his answer. Asked when NFC would be mainstream, he opened with a declaration that his prior anti-NFC statements were still valid.

“On NFC, I think we’re proven to have been right. My flip answer (to) ‘When is it going to be ready?’ Never,” Donahoe said.

He continued: “I think other technology solutions, things like PayPal Here, things like what we’re doing at point of sale where you pay hands-free mobile number and PIN, you don’t even need your mobile [phone], are ways to provide compelling consumer experiences that don’t require the actual use of an NFC technology. So I think location-based payments is something that you’ll see a lot of innovation around. And just as we—in PayPal Here, you see us using the check-in feature on location-based payment fees to be quite powerful, the GPS devices and smartphones. But again, it’s not dependent upon an NFC for the last inch.”

That’s actually a strong and coherent argument for why NFC isn’t going to happen. But he then pivoted and added: “So I don’t know. I think you’ll see more—and I think it’s going to be at least a couple years before you see widespread adoption of NFC in large retailers all over the world.”

So he does anticipate widespread NFC adoption, see?


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