Evan Schuman's StorefrontBacktalk

We’ve noticed an interesting separation between retail programmers’ desire to make transactions happen as quickly as possible and what shoppers notice/care about/experience. As talk of near field communication (NFC) mobile payments approaching reality becomes common, we’re wondering how much of the speed conversation is even a little bit meaningful. (Then again, having a conversation about expensive ways to shave off one-fifth of a second from a transaction is bound to have that effect on a guy.)

Some quick context: For years, advocates of NFC (and RFID contactless payment before that) mobile payments have argued that it will be much faster than magstripe. The practical reality is that the time for the transaction processing is pretty much going to be identical—about two seconds—for all of the above.

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.

Against this backdrop, we have a recent blog post from one of the more sophisticated retail tech advocates out there, David Dorf, who toils by daylight as the senior director of technology strategy for Oracle’s retail group. (Quick reality check: Most bloggers who work for major vendors are extensions of that vendor first and a blogger second. Dorf is that rare breed who isn’t.)

Enough of that nice stuff. Dorf’s argument—which admittedly is a trifle bit self-serving this time (although that doesn’t make it not true)—is that NFC’s value is not in merely processing a single transaction. It’s when the next step is taken and it simultaneously handles CRM/loyalty, coupon and payment details.

Dorf reported that Oracle ran some internal NFC experiments and “we found it to be too time consuming to open each of three files to read the contents representing loyalty, coupons and payment. It took roughly two seconds per file, which doesn’t sound slow, but it moves the consumer from a ‘tap’ to a ‘tap and hold.’ To avoid this issue, we combined the data from all three files into a single one, using separators between the data types. This works well, enabling the consumer to simply tap to handle the combined data exchange with POS. But realistically, the data is owned by three different organizations, and they will want their own files.”

Fair enough. Dorf then reported on some glitches encountered during the data-write portion.