NFC not expected to have major impact on mobile yet

Many experts have predicted that the use of mobile wallet programs will explode in the way that mobile banking has, but now some are cautioning that the speculation may have been a bit premature.

Mobile industry expert Jack Winters, founder of Jack Winters Communication LLC and a fellow at the Institute of Electrical and Electronics Engineers, recently said that he doesn’t currently see any reason for consumers to shift toward mobile payments and away from traditional credit cards, according to a report from Network World. Further, he noted that these payment systems, which rely on near-field communications technology, were unlikely to have a major impact on the market at all until the technology is nearly ubiquitous.

This stands in stark contrast with earlier projections made by other experts which stated that adoption would become so popular that it drove ubiquity. Winters thinks that until NFC technology is so widespread that consumers are physically discouraged from using their traditional cards, there won’t be a reason to adopt, the report said.

“It’s something that can be useful, but not until the majority of phones have it,” he told the site. “I use my credit card for $2 payments sometimes and until I’m blocked from using it I don’t see NFC becoming widespread.”

Instead, Winters thinks the next wave in wireless technology will be that which allows consumers to use their home appliances directly from their smartphone, the report said. This is because he feels this technology has a more practical application in consumers’ everyday lives right now and requires far less infrastructure to be set up on the part of industry.

When will mobile payments’ day come?

It’s currently unclear exactly when there will be enough consumer demand to drive widespread institution of mobile payment systems as the predominant purchasing method, or vice versa, but certainly the companies behind many mobile platforms are now ramping up to it considerably, the report said. Last year, Google’s Android mobile operating system began supporting NFC technology on its “Gingerbread” release, though few phones currently on the market carry the necessary equipment to complete these transactions.

That, however, will likely change soon. Speculation has been rampant that the next iPhone will contain NFC technology, and Google has also developed its Wallet mobile payment system, and has already begun rolling it out. Several other companies across a number of industries are all developing their own mobile payment platforms, perhaps the best-known of which is Isis, the joint venture between AT&T, T-Mobile and Verizon Wireless.

Experts have noted that when mobile payments do become consumers’ preferred payment method, the industry could be worth tens of billions of dollars annually. Many also project that this widespread adoption could happen within the next four years, if not sooner. One of the largest hurdles to the adoption, however, is consumers’ perception that it won’t be secure. Consumers once felt the same way about mobile banking, which has grown to be extremely popular.

Posted in Finance
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