September 12th was the big day and Apple finally showed us their new iPhone 5. However there wasn’t anything there that many of us didn’t know about already, such was the extent of leaks leading up to this event. So far the reaction to the event is one of underwhelming acceptance…It seems that Apple hasn’t been an innovative company for some time now, rather everything they do is playing catch-up with other people’s ideas and innovations while attempting to maximise and squeeze yet more revenue from their current customers. This, Apple does exceptionally well at…
So while there are many blogs, articles, reviews out there that show what’s wrong with the iPhone 5, and there is quite a list, I am going to focus on something they did get right, and that flies in the face of all the technology journalists, who on this subject often show they know nothing about technology and or business combined…Apple got it right when they opted NOT to include NFC in their device.
No NFC for the iPhone
While many reviewers are saying this is dangerous omission I have to say it’s highly sensible. If you believe what tech journalists are saying, then we should all be making NFC enabled mobile payments pretty much now, and they have based this belief not on fact, rather on marketing gumph from a few companies out there, VISA, Google and a bunch of phone networks. What they all fail to take into account is that customer experience is being put ahead of practicality, security and cost. In the real world, this means most businesses will not be using it.
The payments industry is pretty much in a mess, there is nothing wrong with the customer experience of using cash or cards, yet there is a common belief amongst businesses and customers that they should be able to make payments with their mobile device. This has lead to endless different approaches to mobile payments, almost all of which centre around NFC capabilities. However, let’s just think for a moment. Cards are not secure things; we know this by how easy it is to make fraudulent transactions, especially in a digital age. NFC is not a secure form of communication, VISA even state this in their own Patent applications. So put the two together and you get…A great demonstration of how we can use mobiles to make contactless payments, but ultimately a nightmare for merchants with endless costs and charge backs, essentially fraudsters saying “don’t mind if I do”. No wonder most merchants say “no thank you”….
Other phone manufacturers may have embraced NFC in their devices, but even then, each manufacturer and device OS uses it in different ways. Just because your device supports NFC doesn’t mean it supports contactless payments. We see this mess with Googles own Wallet only being able to support the one bank card, its own pre-paid card having to be pulled and you not being able to use your Google Wallet at a typical contactless payment point. Throw in the fact that the phone carriers want a bit of the NFC action and you can quickly see how messy this environment is. Sure it’s competitive, but it’s competitive because no one is doing the same thing and everyone is arguing over who owns what part of an NFC based transaction. Even Microsoft’s Windows 8 phones support NFC based transactions, but you need to get yourself a secured NFC SIM with your card details on it. Not exactly lending itself to you simply adding all your payment cards to the device. But this is because the phone carriers want some of the payment transaction action, and it’s a way to stay friends (at the detriment of practicality, customer experience and security).
I haven’t even spoke about costs of supporting NFC for the merchant, which essentially means new hardware, firmware, support and maintenance for that hardware and perhaps updates to their POS if they want to distinguish between a chip and pin card transaction, signature, card not present, or contactless payment, even mobile contactless payment.
So while so many seem to be singing the praises of NFC and perhaps mentioning concerns that the iPhone 5 doesn’t have NFC, I would say no NFC for Apple is a wise move. Apple usually only embrace a technology once it really has proved itself, so not to deter from the customer experience of using their devices. NFC is no different….As a reviewer of the iPhone 5 there are many areas of concern, lack of NFC is for sure not one of them…