NFC Makes Mobile More Pervasive

While not new, the idea of using a smartphone to pay for things seems like an obvious and easy win. The value of the concept is well understood by all players in the mobile ecosystem: mobile network operators (MNOs), application and service vendors, merchants and consumers.

Yet there remains a great deal of debate about which technology best addresses the technology needed to enable smartphones to make payments. And although there remain several challenges to its success, near-field communications (NFC) continues to draw a significant level of attention and support from many of those in the mobile ecosystem.

These are some of the findings in this month's Heavy Reading Mobile Networks Insider report, "NFC Smartphones Underscore Growth in Mobile Payments." This report examines the NFC mobile payments market, analyzing the most lucrative verticals for NFC mobile payments providers and discussing drivers and challenges in the industry. It includes a comparative analysis of solutions available, examines the geographic landscape of the market and details trends that will likely occur in the industry over the next 18-24 months.

Probably the biggest draw for NFC stems from its ability to do much more than simply facilitate payments. Vendors have already created a slew of applications that enable payments, while also creating a storage vault of sorts for loyalty cards, coupons and other data. Additionally important are applications that provide physical access to buildings, and replacement technology for tickets, payment cards and other IDs.

And while NFC is still not as strong a player in the US as it is in other countries -- especially those in Asian countries -- its appeal is increasing as fascinating new apps are created for the technology. For instance, a Japanese library has worked with Fujitsu Ltd. (Tokyo: 6702; London: FUJ; OTC: FJTSY) to add NFC badges to its shelves. Those interested in a particular book can simply scan the NFC code to read about it before taking it off the shelf or borrowing it.

While the library app clearly illustrates the broad usage base for NFC, it also clearly illustrates one of NFC's greatest challenges: creating a clear vision for all of the stakeholders involved in the NFC market. Although the market is growing, it remains fragmented, and various stakeholders must agree collectively on how to build a cohesive approach to NFC in the future.

If that happens, there is little doubt that NFC will emerge as a strong contender in the mobile marketplace, delivering on the long-anticipated promise of a technology that increases the usability of mobile phones into many other market opportunities.

— Denise Culver, Research Analyst, Heavy Reading Mobile Networks Insider

The report, "NFC Smartphones Underscore Growth in Mobile Payments," is available as part of an annual single-user subscription (six issues) to Mobile Networks Insider, priced at $1,595. Individual reports are available for $900. To subscribe, please visit: www.heavyreading.com/mobile-networks.

DanJones 9/6/2013 | 8:20:26 AM
Re: NFC has a non-payments shelf life IMHO Agreed they do so much more with it in Japan.
[email protected] 9/6/2013 | 4:30:59 AM
NFC has a non-payments shelf life IMHO In time I think NFC will become a pervasive tech used for thousands os applications but I just don't see payments as one of them. And before it takes off at all, NFC needs to have a much better repuaution -- its performance at this year's Mobile World Congress set bcak NFC among many in the wireless community, I'd say.

Note to self: I really must go to my local library soon (while it is still open) to compare suburban UK library tech with Japan's....
MordyK 9/6/2013 | 3:51:21 AM
Re: secure element Sarah, there's a case for NFC minus any SecureElement, as it can simply be an app/OS extension akin to BluTooth. The raison d'etre for an SE has always been focus on the payment security, but as that issue recedes so does the SE requirement.
Sarah Thomas 9/5/2013 | 10:24:41 AM
secure element I agree that fragmentation is already a big problem in the contactless payments space and may continue to get worse. Denise, if NFC wins out, where do you think the secure element will be? In the SIM, so the operator owns in? Or, in the handset, so the OEM does? 
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