Is NFC Doomed? Is iBeacon The Successor?

It seems that NFC has been proposed as the next big thing in making cashless payments so that you smartphone becomes your wallet. But that continues to be delayed for some reason and we the consumers are left waiting for a solution to now do electronic payments. It seems that 2012 was supposed to be the Year for the Mobile Wallet, but that came and went. Then it was 2013 and we are now moving towards the end of the year and it has not happened, though there is a lot of interest. Some are looking at 2014 and beginning to wonder if it has become too late for NFC to become the standard for making payments. It seems like the opportunity for NFC may have past us by.

Apple has yet to to include an NFC chip in the iPhone and it that is not going to happen. It does look like NFC is doomed to make it as there continues to be advances in technology which make NFC less of the required way to go. And while the number of smartphones with NFC chips in them is far lower than it should be, other technologies continue to come about altering the landscape. The big one now is low powered Bluetooth under the Bluetooth 4.0 technology which has been making its way to the market. This is known as Bluetooth Low Energy (BLE) and has been talked about a lot in the press for its ability to transmit over short distances.

NFC must come within several inches of any receiving device to be effective, but BLE can be transmitted easily within a large building. That difference presents many possibilities as a possible alternative to using NFC as the Mobile Wallet. The question for BLE is accuracy as to where a device is, but that should be able to be resolved with technology. The shorter term issue is getting Bluetooth 4.0 utilized in a large number of phones. And with Apple, they have already past that hurdle.

The iPhone 4s and 5 already contain support for BLE insuring a broad audience even before their most recent announcement this week. Given that base, Apple has now chosen to release iBeacon to developers as a tool which is building on top of their Apple Passbook. With Passbook and iBeacon, Apple could leap over all the current NFC efforts and advance their strategy to the world. And there is little anyone can do to stop them. We are seeing slow adoption of Bluetooth 4.0 in the Android world and there really should be a growing base of Android devices supporting it, but there is not. So, the question of whether iBeacon is the successor to NFC may soon be answered and it will be in the next few months. As we have seen in the past, market share drives the standards. And iBeacon may be the new standard for using a Mobile Wallet.

iBeacon and BLE are going to start by doing proximity recognition, such as when you walk into a store and they display something on your screen. From there, it is not going to take long to let you make payments in store with iBeacon and BLE. And with that, NFC will start taking a back seat to an alternative form of the Mobile Wallet. We would prefer that NFC be the primary driver of mobile payments, but they have dropped the ball on this and Apple has now provided another option. And with that, it is going to immediately have a mass audience of available iPhones. Watch for iBeacon to be available in stores to pay for merchandise beginning next year.