The use of mobile phones for touch-and-go payment systems is still at least two years away according to a survey by mobile commerce provider, Sybase, Inc.While Near Field Communication (NFC) technology that allows phones to be used similarly to credit cards is widely received in Asian markets like Singapore and Japan, the technology is yet to develop in most of the Western world, particularly absent in Australia.
Australian banks have tested pilots of NFC in Australia with fair results according to vice president of Sybase’s mCommerce division, Matt Talbot.
“The big issue is replacing all the current handsets in the market,” said Talbot.
MasterCard has been ahead of the game in Australia, launching PayPass touch-and-go payments for purchases under $100 in Australia in the same way that NFC payments would work. In overseas markets like Singapore, Visa and MasterCard have already integrated their services with NFC technology.
Talbot noted that credit, banking and payment companies like MasterCard already have the retail-side infrastructure to make switches to new technologies work, while NFC requires a co-ordinated market that Australia doesn’t have.
NFC has been popular in Japan for years now, being used for everything from interacting with advertisements by scanning integrated chips with an NFC-enabled phone to paying for public transport. This is mostly attributed to operators like SoftBank, which is both a bank and telecom company, which can control the market.
40% of Sybase’s survey respondents from the industry cited lack of co-ordination between these sorts of stakeholders as the main inhibitor of remote mobile payment with NFC in the Western world.
“In 18 to 24 months we’ll start seeing live NFC,” said Talbot.
Europe is slowly beginning to take up remote payments, with companies in Germany beginning to run Sybase services of NFC-enabled phones.
Samsung has recently announced NFC-enabled phones at CES that will be available across Asia Pacific, Europe and North America, and Research in Motion’s (RIM) co-CEO Jim Balsillie stated that NFC will be stocked in “many, if not most” smartphones this year.
The point of NFC technology for payment is to speed up the process, but companies like Nokia have delayed mass launches on their handsets despite having the technology because of the lack of support for it and consumer concerns about security.
Industry insiders still see a future for NFC though – and soon.
“It’s the gimmick underlying the phone you’ll buy next year, with which, if you live in the developed world, you’ll almost certainly conduct the lion’s share of your daily monetary transactions,” said Ex-design chief of Nokia, Adam Greenfield on his WordPress blog last week.
