Is Your Phone Replacing Your Wallet?
Imagine going out for a big night on the town and the only money you need is found right on your smart phone. That concept is becoming a reality and near-field communication is playing an important role.
Near-field communication or NFC is basically short-range wireless technology that allows for contactless mobile payments and interactions. It’s similar in concept to RFID key cards. You basically wave your NFC enabled smart phone close to a reader and it engages with the device. NFC has a range of about 1.5 inches making it a good choice for secure transactions.
The convenience of paying with your smart phone instead of carrying around a wallet filled with cash and credit cards is why handset providers, carriers, banks and retailers are aggressively engaged in NFC development. Google was the first company to introduce an NFC enabled smart phone to the US market: the Nexus S. This summer the company is expected to release the Google Wallet app so Nexus S owners can make payments on PayPass terminals as well as store their credit cards, coupons, loyalty cards and gifts cards on the devices. Not to be outdone, PayPal just announced that it will be providing peer-to-peer payments for Android NFC phones.
Why does this matter? As we develop interactive marketing strategies for our clients, we’re always looking for new methods for engaging directly with customers. NFC would give customers a convenient way to make purchases or receive promotional information in physical environments like trade shows, brick and mortar stores, restaurants, movie theaters and so on. Plus, there are many possible uses for this technology including paying fares for public transportation, providing electronic business cards, POS discounts, and storing life-saving personal medical information to name just a few.
NFC enabled devices and readers are only available on a very limited basis right now in the US. And there are certainly other methods for smart phone payments including premium SMS based transactions, direct mobile billing and online wallets and so on. But with mobile payments are expected to reach $670 billion by 2015, one has to wonder if a large percentage of that growth will be fueled by the introduction of NFC enabled devices.
