It seems like yesterday where the concept of Near Field Communication (NFC) Payments were going to be the next big thing in mobile payments. However, it seems that renaissance is being stopped in its tracks barely before it began. The technology works by essentially “loading” a credit card or bank account profile onto an app on your phone and then using the NFC technology you simply tap a reader with your phone to make the payment.
But as the battle for mobile payments heats up and as banks ponder their strategies, NFC no longer seems as revolutionary. Google, ISIS and others remain committed to the technology however hardware manufacturers still haven’t really gotten behind NFC in their devices.
Others mobile payment providers are bent on revolutionizing offline payments without NFC. PayPal and Square stands as a great example and even locally ABSA bank has decided to have a mobile credit card reader rather than support NFC payments.
The truth is that the old fashioned plastic card is still massive with , for example, 34 million merchants that accept MasterCard around the globe. It seems insane to have to replace the readers of those 34 million merchants to accept NFC payments when they can use their current readers or simply just place the Paypal or Square mobile reader into their smartphone and take payments from anywhere in the world.
The battle between NFC and mobile readers will likely be decided on other issues, such as the customer experience in the store and the offline-online synergies. Banks do not have a lot of time to figure out how to keep their brands relevant and at the top of the winning wallets.