NFC is the most popular issue among the payment system providers, mobile network operators, banks, transport authorities and the list continiues. It offers so much for all parties involved. The most common understanding of people is to use the mobile phone as a contactless payment device or a contactless tag. In this scenario;
-Customer uses a great device for eveything
-Mobile network operator has a great product that ensures the customer loyalty and more data transfer
-Application provider extends its application to a one more media and is making plans for adding more functionality to the application running on the phone.
Well everyone seems happy; but up to now, this scenario has never been realized in Europe in the commercial world other than pilot programmes. There are some big barriers waiting on the road:
First of all, the technology is not mature enough. Well actually not the technology but the party who controls the power has not been decided yet. I am referring to the infamous SWP protocol. There are two possible positions of the NFC controller on the phone. It’s either in the handset or in the SIM card. This practically means that if the mobile network operator or the customer him/herself is going to decide what to install/use on the phone. If the secure element resides on the SIM card, that means no one can do anything without the authorization of the mobile network operator. With the introduction of the SWP (Single wire protocol) SIM card can host an application that uses the contactless interface provided by the handset. This opens a whole new world of opportunities to the mobile network operators. (I am planning to have a separate post for this) But on the other hand it forces the application owners to work closely with mobile network operators, moreover they can not do anything that the mobile network operator does not approve.
Secondly, the killer application like transportation is quite complex and have many different players involved. There are already also complex scenarios of owning, using, renewing a transportation schema contactless card and when a handset comes into the picture things go more complicated.
Another issue is the personal taste. Researches indicate that people change to their phones in every two years and the question what is going to happen to the balance on the previous phone? How will the balance be transferred to the next phone?
I believe NFC will create a great deal of changes in our daily life and payment habits, however it will take some time.