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.

NFC Mobile Payments Too Slow For London And Olympics

London Underground minimum performance not meet by Mobile Wallet.

We have been waiting for NFC payments to take hold this year with smart phones. Last year, estimates had them taking off by the middle of the year here in the US as more smart phones had the NFC capabilities included. The Galaxy S3 from Verizon does not have Google Wallet as Verizon is working on their own implementation for NFC payments. All of this makes one wonder how much longer it is going to be before things get organized and there is widespread usage of NFC payments. So, here we are past the mid-point in 2012 and we are not hearing much about wide scale adopting of NFC payments.

What is the problem? Is this a Fragmentation problem because of all the competing groups and methods for processing payments? It could be, but there may be some other problems involved with getting things implemented. Things for the future are looking better, but that is still in the future. Recent discussions at the TechCrunch Disrupt New York event had people talking about the future.

"NFC is coming. It's a wave," he said. "But there are a lot of hitches in use cases. People can get a discount from an ad. That's much more simple. But when NFC is in an environment where where 2 seconds make or break the transaction at the merchant level, there are still issues that need to be overcome." In other words, while NFC sounds like the future of mobile payments, and probably is the future of mobile payments, don't throw out your credit cards just yet.

And it is that 2 seconds for make or break which seems to have it be a breaking for the future of NFC for some. With the coming Olympics in London, there was a lot of hope for taking advantage of NFC payments there. But, one group has decided to not use NFC payments. In the London Underground, which is often referred to as "The Tube", they have set the acceptable threshold of processing an NFC transaction at 500 milliseconds. Anything longer than that will slow the movement of people through the payment gates.

And it is because it takes longer than 500 milliseconds to process the mobile payment, they have decided to not use NFC payments in the London Underground. This is a big deal and points out some of the problems with the NFC processing of payments. People expect to Tap and Go, but with NFC, it has turned into Tap, Hold and then Go. The end result is that it slows the process down when you are trying to move large volumes of people.

In the case of the coming Olympics in London, anything that impedes the rapid flow of people onto the rails is not acceptable. And it is those kinds of things which appear to be slowing the acceptance of NFC payments for things like mass transit. There needs to be significant improvement in the process to gain wider acceptance.

If you have to do more than "Tap and Go" to make purchases, people are going to look at alternatives. People may use NFC to purchase a card which has amounts added to it to make purchases. And that is because the "Tap and Go" features currently work best with a card. That is what the London Underground is relying on for their Oyster payment card, which is widely used in the London Underground. Until NFC can break the 500 millisecond barrier, acceptance and usage is going to slower than some had hoped.

Square Credit Card Processor Sees Significant Growth

Mobile credit card payment provider sees significant growth

If you are a small business owner and have not heard of Square, you probably need to look into this company. The are reporting a milestone of 2 million people who are using their services to accept credit card payments from customers. If you are a small business who is mobile this is a great idea for you. Even if you have a store front, Square can get you up and running to accept credit card payments in a matter of minutes. Then they will send you, for free, one of their square credit card readers for your business. It is that simple.

The "dongle" device plugs into your iPhone, iPad or Android mobile device to handle your credit card transactions. I have talked about the value of mobile payments for small business owners and with their recent news, they are continuing to show growth for a much simpler way to accept payments. In the most recent information, Square has doubled their clients in 6 months and that is showing just how popular they are becoming. The current estimates of the volume of transactions has them processing at $2 billion per year. That is a lot of money flowing through the Square clients and being processed.

While they take 2.75% of each transaction, the ability to set up your account quickly and the freedom of movement with their square device makes it well worth using. For your small business, it is the ease of use which brings value and is something new for most people to be seeing. At the moment, there is not a lot of competition in mobile credit card handling and Square has now positioned themselves as the leader in that area.

And with the recent growth, they are now starting to hire some formidable executives to round out their team. Their most recent addition is Sarah Friar from Salesforce to be the companies CFO. And there will be others in the next few months given the rapid growth they are seeing. As the economy continues to recovery, there will be more growth for mobile credit card handling.

You can head over to the Square website and take a look at what they offer.

Will Mobile Payments Have Slow Adoption In The US?

Based on a recent survey, people are concerned about privacy.

 
Mobile payments have been in the news this week as reports of various organizations are talking about rolling out mobile payments through the use of your smart phone. More phones are beginning to arrive with NFC (Near Field Communication) chips contained in them. Rumors have the coming iPhone 5 as containing the NFC chip. In the US, that means that by the end of the 3rd quarter, the majority of new smart phones will contain NFC chips for utilizing mobile payments. One of the big players in this was believed to be Google and their Google Wallet which has been in the news with the Galaxy Nexus and Verizon conflict. Unfortunately, things have slowed down and competition from Isis which has the support of several wireless carriers here in the US is causing confusion as to who is the leader. There are all the competing methods and some fighting to stop them in the European Union.

We talked about mobile payments being part of your strategy as it looks like 2012 is going to be the year we finally see wide spread roll out into the market. Credit card companies are also embedding chips in the cards for mobile payments as well. There are growing signs that it is going to happen in the US and around the world as well. So, why have we not been seeing a faster adoption rate here in the US? There may be an answer to that question as a result of a recent survey done by the University of California at Berkeley.

It would appear that the idea of tracking someone's purchasing habits or location are becoming an obstacle to the adoption of mobile payments. We all remember the big uproar when it was revealed that some wireless carriers here in the US were tracking people's actual location via cell towers. People like their privacy. You then add in all the hacking which has been done over the past year exposing names, address information, emails and other personal information. People here in the US are sensitive to the potential exposure of more information through the use of mobile payment systems used via smart phones.

We found that Americans overwhelmingly oppose the revelation of
contact information (phone number, email address, and home
address) to merchants when making purchases with mobile payment
systems. Furthermore, an even higher level of opposition exists to
systems that track consumers’ movements through their mobile
phones

While this survey was actually sponsored by Nokia, there is apparently valuable information here which those wanting to handle mobile payments need to pay attention to. There are a large number of benefits from moving to mobile payment systems and predictions of them replacing the use of currency have been circulating. But, it is the idea that some company or marketer may know your buying habits or movements through the use of mobile payments is an issue. This is what has people very concerned about this coming change in technology.

We are bombarded with phone calls from people trying to sell you something, get you to take a survey or donate money to some cause that has people weary of other intrusions. These are on our home phones. Since mobile payments via your smart phone provides the people handling the processing of information access to personal information, such as your mobile phone number, it has many concerned. I have tried to not give out my cell phone number because I do not want to get the same type of calls I get at home. I do not need someone calling my cell phone asking me to take a survey. And that is the potential with all the personal information which is potentially exposed each time that you make a purchase.

Existing "Do Not Call" lists do not stop this potential because of the "existing relationship" loop hole in the law. While I want to take full advantage of mobile payments once things become more widespread here in the US, my concerns about my privacy are something I worry about. There are probably a lot more people who are more than concerned and will hesitate to make a decision to use NFC as a payment method using their smart phone. The privacy issues have not been talked about much and we can hope that this recent survey raises this topic up and is addressed.

You can download the UC Berkeley report and read it for yourself.

Are you concerned about possible exposure of personal information through the use of mobile payments on your smart phone?