Tim Green: Turning off the tap: NFC's terrible week | Mobile Payments | Mobile Entertainment

Tim Green: Turning off the tap: NFC's terrible week

Tim Green: Turning off the tap: NFC's terrible week
Tim Green


Payments / NFC / September 19th 2013 at 2:00PM

Apple and PayPal are climbing over NFC to get to Bluetooth, and even Google's blanking it.

If NFC is the tech that requires you to touch it to make something happen, then it's fair to say that in the last week NFC has been more than tapped.

It had the shit kicked out of it.

OK, perhaps that's a bit strong. But recent moves by Apple, PayPal and Google have certainly bruised the contactless tech.

NFC has never enjoyed universal support from the big mobile commerce stakeholders.

The tech has been pre-loaded on high end Android devices such as Samsung Galaxy phones, and on Nokia Lumias. But it's lacked support from Apple, which commands a quarter of the smartphone market.

And this is not just about numbers. Like it or not, Apple and its users largely define trends in consumer behaviour too.

True, there have been rumours about Apple registering NFC patents and hiring NFC teams, but most observers now accept that Apple will never pre-load the tech.

Maybe it just doesn't want to join a party it didn't start. Maybe it wants money from Visa et al to help them with their contactless mission.

Either way, it looks like NFC on iPhone won't happen.

Instead, Apple will base its short-distance connectivity plans around Bluetooth Low Energy (BLE). It's come up with a platform called iBeacons (based on BLE) that pairs to a nearby device and can exchange info from two inches to 160 feet.

Apple has already embedded iBeacons into its 700m device range and begun selling the concept to developers.

It reckons retailers can use iBeacons to identify an opted-in user to tell them about stuff, make offers and possibly take payments. Maybe before the punter has even entered the shop.

Yeah, I know. It sounds a bit like that age-old nonsense about walking past Starbucks and getting pinged.

But I think the difference here is that the experience can be tailored by distance from the product. It could be used by retailers to combat 'showrooming' – or even used guerilla style to alert shoppers to offers in their store when the punter is in someone else's.

It could also be good when it's consumer initiated. In future, you could just scan a barcode and iBeacons will automatically generate a payment menu from which you can pay.

No need to tap on anything.

Security remains a worry, of course. And there's the question of how a retailer's BLE device links to its stock and POS systems.

Now, as I said last week, I don't think any of this will start Apple on the journey toward becoming a bank. But it will sell a lot of phones and maintain its market-making position if every payment firm and retailer makes its systems iBeacons-compatible.

They're already on that road.

Just days before the 5S launch, PayPal announced PayPal Beacon, which pairs an in-store BLE device and a PayPal app to sense when a consumer enters the store.

It then speeds up the 'pay with your face' idea that PayPal is experimenting with, letting sales assistants check and verify the PayPal user picture on his or her payment till.

David Marcus, president of PayPal, said: “Just walk in a store, and, like magic, when you’re ready to pay, money is transferred securely. No wallet. No card. Nothing to do. Not even touching your phone.”

PayPal and Marcus hate NFC. They've said so many times in the past.

So they must have been delighted to read that this week's upgrade of Google Wallet extends the product for all Android users – not just those with an NFC phone and SIM.

Now, that's not a rejection of NFC per se (Wallet still makes NFC payments with the right handset), but it does skew the emphasis of Google Wallet away from contactless in-store payments towards loyalty, offers and online transactions.

So, not a great few days for mobile NFC.

It's hard to say what the long term impact will be. NFC works very well for plastic card payments and banks/Visa/MasterCard are set on making it the successor to Chip and PIN.

Last month, Visa said British consumers made 51 million contactless payments in the year to July 2013. And it expects 50 million a month for the whole of Europe.

As long as people keep using plastic, I'm sure these numbers will keep rising.

And they will use plastic for a long long time.

But Visa also plans to launch an NFC mobile wallet this year. That's the one I'd worry about.