Thursday, April 5, 2012
NFC technology uses a radio frequency embedded in a payment tool, most often a card or a smart device such as a phone or tablet, to send a signal to a receiver in the POS device. The transmitter needs to be close to the receiver, as close as 3 centimeters, for the signal to be received. To make a payment, the sender puts the information into a phone and taps the receiver's phone or POS to transfer the payment. The major card brands are mandating merchants accept the highly secure NFC-enabled cards by 2015 or face increased liability for fraud.
Keynote speaker Bill Gajda, Head of Visa Inc.'s Mobile Products division, opened the summit. He said the existence of worldwide NFC standards will allow NFC payment technology to take off because applications and phones can be developed with confidence that they will work around the world. "We don't want to develop on a dead-end technology," he said.
Gajda noted most new mobile phones either include or are going to include NFC technology. He believes this, along with the card company mandate, is driving NFC adoption. He also noted that, in addition to nonpayment NFC innovations, NFC is poised to not only become part of the POS but also to extend beyond the POS to such conveniences as peer-to-peer payments.
Divergence from Gajda's view of NFC came with the very next panel when Michael Stephenson, Group Manager of Payment Innovation for TD Canada Trust, pointed out, "Contactless payment doesn't do anything for the consumer." Panel members noted that while NFC provides a secure solution for transactions the next step is to certify cloud-based transactions so those transactions have a security standard similar to the Payment Card Industry (PCI) Data Security Standard (DSS).
"The barrier around mobile is the accessibility of the technology and the adoption," Stephenson said. "We are years away from having any type of scale in the mobile space."
Program master of ceremonies Richard Crone, Chief Executive Officer of Crone Consulting LLC in San Carlos, Calif., a consulting firm offering electronic payment strategies for the payments industry, said in his presentation that solutions other than NFC will win the day at the POS. He believes NFC solutions offer little flexibility to merchants and require an investment by the merchant. According to Crone, there are alternative POS solutions merchants may acquire for free – and these solutions offer merchants more flexibility with less PCI scope (meaning less security costs) and more opportunities to engage customers.
"Mobile payment is not just about payment," Crone said. "It's about engaging and enrolling customers." Payment software such as that offered by PayPal Inc. and Google Inc. (and soon Isis, among others) allows merchants to collect and analyze data on customers; contact customers with coupons, offers and rewards; and do back-end calculations.
"NFC is a solution in search of a problem," Crone said. "Commerce renders NFC obsolete." He believes the way a camera is used on new smart devices with bar codes and QR codes is the future of payments. "NFC is at the peak of inflated expectations; bar codes are at the [start of the] slope of enlightenment," he said. 
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