A divergence of opinion shook through the first few hours of the Strategic Solutions Network's Mobile Contactless Payment Innovations Summit in San Francisco April 4, 2012. The payments industry's push toward near field communication (NFC) technology was up against a rapidly accumulating and disruptive host of payment technologies that offer advantages NFC doesn't, while avoiding NFC problems.
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 device to transfer the payment.
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 for merchants to accept NFC-enabled cards by 2015, is driving NFC adoption at the POS. He also noted that NFC is poised to extend beyond the POS to such conveniences as peer-to-peer payments.
In the next panel, Michael Stephenson, Group Manager of Payment Innovation for TD Canada Trust, said, "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.
Program master of ceremonies Richard Crone, Chief Executive Officer of Crone Consulting LLC in San Carlos, Calif., said in his presentation that solutions other than NFC will win the day at the POS.
Crone said NFC solutions require an investment by the merchant, but merchants can acquire alternative POS solutions for free that offer them 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. 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 increasing use of smart-device cameras in conjunction with bar codes and QR [quick response] codes points toward the future of payments.
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