It seems that the past 2 versions of the iPhone have had media speculating and claiming the iPhone will support NFC, primarily for some NFC based Wallet experience. Speculation surrounding the iPhone 5 is no different, especially as Apple have recently applied for a number of NFC based patents for mobile devices.
However, to date, Apple (and the people on Wall Street) has been pretty sceptical about the whole NFC wallet experience, and so far Apple has said NO to NFC in its devices. I personally think this is a wise move by Apple, and shows that they aren’t just jumping on a technology bandwagon, rather assessing the pros and cons of the technology for certain uses (commerce it seems not one of them). Unfortunately others see this as a ground to get ahead of the competition, and are investing heavily in the technology, without I feel adderssing the issues with NFC commerce. The upcoming Microsoft Wallet uses NFC in a secured SIM fashion, making it quite restrictive, while the Google Wallet (which is an NFC based solution and has been available for sometime) struggles to gain any form of real traction with consumers and may well be dissapearing from Sprint if rumours are true.
NFC in a mobile device
NFC has been available in certain mobile devices for a number of years. Early Nokia devices supported NFC but, well let’s be honest, what could us users do with NFC? There are a number of issues with mobiles supporting NFC, mainly due to the antenna required for NFC and where to securely house it in the mobile device itself. Many manufacturers have experienced lots of problems with this, and it is still a problem when integrating NFC into a mobile device. Reliability is usually the biggest concern, and it doesn’t take too much for NFC communications to simply stop working. This presents a challenge to mobile manufacturers, one which isn’t as easy to overcome as the media and users think.
The role of NFC
NFC is great for sharing quick bits of information that we don’t mind sharing. It works great when sharing things such as website addresses, third party pictures, even certain personal information – such as a business card. But once we start to want to share more private and personal information, information we wish to keep secure, then issues arise. After all NFC broadcasts data using radio waves.
NFC and commerce
Apple is sceptical about this, and its right to be. The NFC contactless model with credit / debit cards isn’t great, and hasn’t really taken off. You also don’t have to spend too long on YouTube to watch a number of videos highlighting security issues. Data that is broadcasted essentially can be read, with this in mind and the fact that payments currently rely on credit / debit card details (un-encrypted) being read, you can see where security issues can be exploited. VISA is aware of this, and it’s even mentioned in their patent application form.
This issue of security and relying on an infrastructure not designed for mobile / digital commerce is at the heart of why I believe Apple has not embraced NFC, and is why we have seen other mobile commerce suggestions put forward by Apple.
A different model
At my own company, CloudZync, we also believe that NFC is a great technology, with a role to play in the future of mobile communications; however we don’t believe its appropriate for commerce in its current format.
Sharing information with NFC is great, but again, we must be aware of security and of the potential costs and practical uses of this. I have seen many demonstrations showing users scanning NFC tags in a magazine to read the information on their mobile device. However, how much extra does an NFC tag enabled advert cost as opposed to an advert running a 2D QR code? And if we have multiple adverts near each other, aren’t they going to cause issues when trying to read the data? We must ask ourselves, “does an NFC tag in this way add anything to the user experience compared to a QR code”. The answer I would say is a big NO. This is a bigger NO when you remember how cheap QR codes are to use and the fact that they can be read by any Smartphone right now.
The issue of cost for merchants is also overlooked with NFC, and that is another reason why we haven’t seen contactless cards as yet take off, let alone mobile payments.
Unfortunately to me it seems to much emphasis has been put on NFC being combined with the current card schemes to deliver contactless and mobile payments. The model doesn’t make too much sense and feels like a bit of a “hotch potch” approach to a solution. Though I am not an Apple fan, I must say they don’t often do “hotch potch” solutions, and so it shouldn’t be of great surprise if we see Apple continuing to say no to NFC for commerce. I’m sure Apple may use NFC in their future devices, but for commerce, I’m not sure they will at all…
My own company, CloudZync will be launching its own take on mobile commerce very shortly, and there isn’t any NFC required…