Near-Field Communication (NFC) that allows smartphones to be used as touch-and-go payment systems is the future of the smartphone market according to industry professionals.

NFC has already been used for the past few years in Asian markets like Japan for quick payment, transport ticketing and advertisement interaction, but industry execs say it’s the future of the Western market.

“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.

For smaller vendors and telecoms like Deutsche Telekom AG and France Telecom SA who lost the app market to the surge in Google and Apple’s own app stores, NFR is the latest technology to give them a market edge.

“Google’s massive, but Google does not have a billing relationship with 99 percent of its customers. That’s our opportunity,” Chief Tech and Innovation Officer of Deutsche Telekom told Bloomberg this week.


The aim for companies like this is to replace credit cards for simple, everyday transactions and make their products and services more appealing as this becomes a widespread phenomenon.

Nearly half of the most active mobile device users would welcome using their phones as a payment system according to recent research by Accenture. The same research found that 73% of the surveyed group from 11 countries had significant privacy concerns about the technology.

According to Greenfield, Nokia didn’t end up going with NFC when the company’s engineers developed the technology on their handsets because of the perceived privacy fears of consumers.

Credit card companies are ahead of the game though. MasterCard cottoned on to this a few years ago, implementing its PayPass touch-and-go system for transactions under $100.

Visa worked with National Australia Bank and Visa back in 2008 and 2009 to trial NFC in Australia for three months. Despite achieving positive results and finding high consumer demand for NFC mobile services, it still hasn’t taken off in Australia.

While some like Adam Greenfield have suggested uptake as soon as the coming year, reports like one from Juniper Research suggest that one in six smartphone users will be using NFC handsets by 2014. IMS Research indicated that 12.5 million locations for NFC payments with the tap of a mobile would be set up by 2013.

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