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An article relating to this blog post on Finextra:

Contactless m-commerce fails to take off

The development of contactless mobile payments has failed to live up to expectations and the technology will account for just a fraction of the value of commerce transacted over cell phones this year,...

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NFC Just Doesn't Mean Convenience For Consumers

Perhaps the lack of popularity of NFC is due to excessive assumptions regarding NFC and the absence of real benefits overall.

The assumption in the article that other methods require more expertise on the part of the user is unfounded.

I am personally familiar with systems which are both safer and easier to use than NFC and SMS. Customers choosing to use SMS transactions for instance, generally already know how to send an SMS so it's hardly required expertise, rather it's an extension of a communication method they already use. It isn't suitable in enough scenarios though and customers either love it or hate it.

The first problem that comes to mind with NFC mobile is that the phone becomes a target for thieves again, an 'instant tenner'. For the user, or the merchant, a tenner isn't enough. What's the story, scared of the obvious risks and want to have a stab in the dark without risking too much liability?

Going on my recent experiences dealing with banks and altering accounts, I'd say the real problem is that consumers know how difficult it will be to 'recapture' their accounts if their NFC enabled phone is stolen.

It recently took me 40 minutes on the phone to get my customer number, and then another 40 minutes to fully sort out web banking with Commbank. I can only imagine the hoohaa I'd have to go through if my NFC mobile was stolen. It just isn't worth it to spend a tenner. I could see the same process completed in seconds, without call centre staff, and NFC wouldn't help me there.

The biggest obstacle for NFC is that in every interaction process there are a number of separate processes or actions and stakeholders, and the obvious goal is to minimise the the process to a single act by the user.

While NFC appears easy on the surface, just wave it, there are dangers lurking and there are some obstacles to the current approaches, preventing NFC from ever becoming the penultimate in convenience.

I hear talk of standardisation and compatibility, but that isn't the only issue. There are behind the scenes interconnections which need to happen to enable processes to be effectively streamlined. Those connections are difficult to make and the NFC model is unlikely to succeed in the face of newer approaches. NFC requires too many parties to trust and potentially be liable for each other's actions.

Imagine the committe of NFC operator, telco, automobile sellers, ad agency, broadcasters, banks, finance companies, credit agencies, insurance companies, police and registration departments, all getting together to enable a TV viewer to test drive a car (and be pre-qualified, finance checked and approved) delivered to the door in the chosen colour and then deciding to take it on the spot, financed, insured, registered and transferred into the viewers name. We see it as a half dozen keypresses.

Where is the liability when the wrong person gets the car? Does everyone need to trust everyone else involved? The wrong approach opens up a minefield of potential liability. NFC is part of the wrong approach. It will always need something extra to make it work, ad infinitem.

NFC won't really make things as easy as they could be, and competitive approaches will overtake it long before universal deployment is effected. Sure you can always give every human a reader, but it is unlikely banks could afford it and consumers don't want to pay for it. They could also be worthless tomorrow, going on past experience.

Our reader-less approach makes a stolen mobile worthless to thieves, even to get a tenner, let alone a car, and more importantly, making it really easy for the customer to get back up and running if their mobile is lost or stolen.

Simply take that old mobile out of your drawer or buy a new one and  in a few minutes, probably without answering a question other than what model of phone you want if you're buying a new one (even just upgrading), you are back in action. It can even make it easier for Telcos to sell phones to existing or new customers, streamlining the process to simply handing over a new phone.

The customer will still have all the data which was on the stolen or lost phone, but a stolen or lost one won't be of any use to a thief wanting to spend their money.

The most important part is that we have worked out how to be the silver bullet solution enabling a multitude of interactions to be compressed into the least number of actions for the user.

So it all comes down to convenience really. Convenience is reducing all the unpleasant details into an easy action for the user, in all scenarios, and it takes the right processs in the background to enable all the stakeholders to participate just as easily.

From Twitter and TV to Tesco that's where we aim to be, easily.


Comments: (3)

Adam Nybäck
Adam Nybäck - Anyro - Stockholm 18 March, 2009, 05:54Be the first to give this comment the thumbs up 0 likes

"NFC is part of the wrong approach. It will always need something extra to make it work, ad infinitem."


Totally agree. NFC alone is great for things like bus/train tickets. For other purchases, I think a PIN code would be the "extra to make it work".

A Finextra member
A Finextra member 18 March, 2009, 10:28Be the first to give this comment the thumbs up 0 likes

Hi Adam,

I'm not really a fan of carrying much, that swollen wallet full of credit/debit/licenses/membership/rewards cards and family photo's, and dongles and things - and I'm even less a fan of PINS.

That's why I've focused on a simple to use and safe solution which doesn't introduce a multitude of risks with cards and gadgets and encryption and hackers and forgetting my PINS and passwords because of course I can't make them all the same.

... or is there a way that I could?

That would be neat wouldn't it? No cards, no pins, no passwords to remember. No personal or financial data in any transaction.

No logons and aliases or passwords for the web, the sites will remember who you told them you are, no spam, because you'll only take mail from people who are accountable like you.

No credit card details being stolen on the net. No credit card.

Why not?

Just eliminate a whole range of costs and hazards inherent in the plastic fantastic experience, and also the transaction costs are lower. I think that online and on street merchants would happily see their profits increase through lower card fraud losses, and they would be ecstatic to see lower transaction costs.

Some merchants just might be awfully relieved to not have to handle any card, bank, or customer data inside their business, while still being able to reward loyalty and be closer to the customer than ever before.

Welcome to my world. It's mobile.

Adam Nybäck
Adam Nybäck - Anyro - Stockholm 19 March, 2009, 03:37Be the first to give this comment the thumbs up 0 likes

Thanks Dean. The only problem (I hope) with your solution is that it sounds too good to be true. Please let me know when a demonstration is available on youtube. I would love to compare it to other solutions currently available in Sweden.

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19 Mar 2009


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This post is from a series of posts in the group:

Innovation in Financial Services

A discussion of trends in innovation management within financial institutions, and the key processes, technology and cultural shifts driving innovation.

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