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Erik Bogaerts

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Erik Bogaerts - Naqoda

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The 10 centimetre revolution

22 February 2011  |  4401 views  |  2

2011 is the year of mobile aka near field communication (NFC) payments.


Well this year it definitely looks more promising. According to analyst firm Juniper Research, mobile phone payments will reach a critical mass this year thanks to the creation of eco systems uniting hand set vendors, loyalty providers, trusted service managers, retailers and mobile phone operators. In the US, operators have already teamed up to build NFC infrastructure under the Isis alliance. Similar initiatives are on-going in the Netherlands and Korea.

Some statistics are there to support the statement made by Juniper Research. In the UK some 40,000 stores are equipped with NFC readers, capable of reading  mobile phones and contactless debit and credit cards. They include Pret a Manger and Little Chef. The Co-Op and McDonalds also plan to make the service available across their UK outlets. The prognoses looks promising as well: 457 million NFC enabled handsets and 3.5 billion NFC transactions by 2015, equating to $30 billion turnover by 2012.

Consumers are ready too. Most of us have embraced NFC technology for a couple of years now. Oyster cards are used by thousands everyday  to pay for a tube pass or bus ticket. But the technology capability doesn't stop there. NFC also allows you to check into your hotel while you’re on the way there, simply by tapping your phone against a proximity reader. I’m sure next year, when you attend the GSMA World Mobile Congress in Barcelona, your mobile phone will be your entry pass. It’s probable that tapping your phone against smart posters will provide you with information about the conference sessions agenda. And when you're back at the office your phone will provide the credentials for you to be able to login to your computer.

It took ATM's 17 years to come to maturity. It took the Internet a good 10 years. So by this ratio, surely it will only take NFC a couple. Ubiquitous was the keyword of 2010. But it was just a word, now its time to move from talking to action. Just like language limits thinking, service limits markets. NFC is the service that will enable new convergence between industries. It will bridge the virtual and physical world and by doing this, it will revolutionise the payments world as we know it.

The new keyword for 2011 is NFC.


Comments: (3)

John Dring
John Dring - Intel Network Services - Swindon 23 February, 2011, 12:29

NFC is fine.  To me its another channel to acquire a transaction, and its slightly more convenient than chip and pin and a lot faster.

My only issue with the current NFC trend is to call it mobile payments when the NFC chip is incorporated into a mobile device.  Its still a normal payments network micro-transaction, but happens to be achieved by waving your phone close to the POS device rather than your wallet.

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Erik Bogaerts
Erik Bogaerts - Naqoda - London 23 February, 2011, 12:35

The application of NFC to (mobile) payments is indeed just the tip of the iceberg. The other potential applications are certainly as, if not, more interesting.

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John Dring
John Dring - Intel Network Services - Swindon 24 February, 2011, 08:29

Note - this is way to 'mobile' payments.


Even then the charge is applied to a new wallet, not your existing phone account and hence has a barrier to adoption problem (sign-up)

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Erik Bogaerts is the owner and director of Naqoda, a FinTech company providing software solutions to the financial industry.

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