Forbes Magazine: Is NFC Payment Heading for Destruction?

According to Forbes magazine, the new generation of Android smartphones are equipped with a special device, the NFC (Near Field Communication) chip. Therefore, in theory, any mobile phone can become a payment device. However, strangely, there are few software on the market that support NFC payment on a large scale, and this payment method faces the risk of disappearing due to incompleteness.

NFC is a technology that allows smartphones, credit cards and similar devices to communicate by bringing them close together. Since 2004, several major mobile phone manufacturers have joined together to define this standard. Nokia, BlackBerry, Samsung, Microsoft and Google have supported this technology in their respective operating systems for more than a year, and some NFC-enabled devices have also entered the market. At the same time, the leading companies in the credit card business and well-known major banks and payment services in the United States have launched corresponding services; and telecommunications companies such as AT&T, Verizon and T-mobile have announced similar services in 2010.

With such strong support, one might expect NFC to be used with great fanfare. In fact, there are signs that it has only potential growth. For example, terminals that support Visa and MasterCard credit cards are appearing more frequently in stores; in New York, some taxis and subway stations offer NFC payment services. Riders can easily pay by simply bringing the NFC device and the card reader close together; in Chicago and New Jersey, similar services are also seen in trains and subways.

While the infrastructure is starting to accept NFC payments, the software on the latest devices hasn't improved much. Google Wallet only works on a limited number of phones, and the latest devices like the Samsung Galaxy S4 and HTC One, despite meeting the hardware and software requirements, don't support the payment method. American Express has a partnership with US telecom operators, ISIS, but only offers services in a few areas; Samsung Wallet, launched in partnership with Visa, debuted at Mobile World Congress, but it's not on the latest flagship phones; MasterCard's credit cards with the PayPass logo support NFC, but its own Masterpass service has dropped the option.

So the challenge is that there are so many players who want to make a big splash in this space, but they are constrained by each other and can only move forward in a stumbling manner. Computing expert Bob Frankston said they cannot play a strategic role in this space. "NFC is just a way to transmit data," Frankston said. When explaining why payment services such as ISIS are struggling, he said, "What you really need is to transmit some data to authenticate the transaction, and the rest can be done using network protocols. There is no need for the role of the telecommunications company as a middleman."

Companies like LevelUp and Square are also accelerating their mobile payment business, which objectively weakens the chances of NFC becoming a mobile payment method. This is why when talking about NFC, Samsung no longer mentions payment, but rather sharing photos, videos and other things. Will the future development go beyond NFC payment? Will other solutions prevail? Perhaps only time can answer.