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NFC Payments – The Future of Mobile is Already Here


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NFC Payments – The Future of Mobile is Already Here

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NFC Payments – The Future of Mobile is Already Here

  1. 1. Near  Field  Communica0ons  (NFC)  Payments  –  The  Future  of   Mobile  is  Already  Here ©  TechAhead
  2. 2. Near Field CommunicationThere is a lot of buzz about NFC or Near Field Communications, a technologythat allows transfer of data from smartphones by just tapping or swiping. NFCworks on radio frequency, allowing mobile phones to communicate with eachother when they are in close proximity. Bluetooth also allows data transferbetween devices. However, it requires a manual configuration. On the other hand,smartphones with NFC chips connect with each other by configuringautomatically once they are tapped. This presents a convenient payment solutionthat is being touted as the new wallet.While NFC seems an exciting new proposition, there are several hurdles that itwill have to clear before it becomes an accepted mode of payment. ©  TechAhead
  3. 3. NFC Enabled Mobile PhonesFirstly, smartphones need to be NFC enabled. At present, worldwide, only around3.5% of smartphones are NFC enabled, but this scenario is expected to changedrastically. As per statistics from Yankee Group around 7 million NFC enabledphones were expected to have been shipped worldwide by the end of 2011. Thisfigure is forecasted to grow to 203 million by 2015, and if this does happen, partof the infrastructure required for NFC mobile payments will be in place. In Asiancountries such as Japan, China and India, tap and go payments are alreadypopular, signalling that NFC adoption would also be quick. ©  TechAhead
  4. 4. Efficient Payment MechanismThe second aspect required for the success of NFC is that online paymentsystems need to be set up so that customers can use NFC for all their paymenttransactions from store purchases to parking fees. Several large players in thesector are in the process of setting up these systems and trials are underway.Google Wallet, ISIS, Visa Wallet and American Express’ Serve are already inuse, but there are still several issues to be sorted out. For instance, at present,there isn’t a single payment system that is universally accepted. It will take awhile before this happens as the required infrastructure will have to be set upworldwide, across stores and other points-of-purchase. The first large scale trialof NFC will take place at the Commonwealth Games 2012. ©  TechAhead
  5. 5. SecurityThere are also issues related to security that need to be addressed. Althoughmany people use mobile payments, there is a general concern about its securityaspects. Companies will have to put in strong encryption and passwordauthentication protocols, and customers will have to use password locks, anti-virus protection and other security software to prevent unauthorised usage oftheir NFC enabled device. Once these issues are addressed, NFC payments willtake off. ©  TechAhead
  6. 6. Comparison Near  Field  Communica0ons  (NFC)  Payments  –  What  to  Expect  :  SummaryPoints  in  favour Points  Against • Convenience  of  tapping  mobile  to   • Only  3.5%  of  smartphones  are  NFC   make  payments  –  no  need  to  carry   enabled  at  present wallets  or  credit  cards • Based  on  RFID  and  can  be   • No  standardised  payment  mechanism   automaIcally    configured  compared  to   although  there  are  several  players  in   Bluetooth,  which  has  to  be  manually   the  market configured • Promising  adopIon  figures,  especially   • Issues  related  to  mobile  security  such   in  Asian  countries as  unauthorized  usage  in  case  of  loss  of   phone  or  virus  aMacks,  spyware  and   malware ©  TechAhead
  7. 7. SummaryWhile NFC is being adopted in a small scale, its current potential is just the tip ofthe iceberg. As per figures from Juniper Research, NFC payments will belaunched in around 20 countries by the end of 2012, and forecasts estimate that$50 billion worth of NFC transactions will be carried out by 2014. So clearly, thepotential is huge, and once things fall into place, NFC payments will be the newcurrency, and it will soon be time to bid farewell to your wallets and credit cards.At TechAhead, we have helped clients develop apps that support NFCpayments. For more information on how we can help you for your mobile appsdevelopmentrequirement, write to us at for FREE 30minutes no obligation consultation with our mobile experts($200 Value). ©  TechAhead
  8. 8. Thank  youReach  Us: ©  TechAhead