The geek and financial press are all aflutter with talk of mobile wallets, mobile commerce and NFC. An individual could spend forty hours a week for a couple of months reading everything there is to know about the flood of start-ups, consortia, technology, and merchant efforts to prepare for this inevitable evolution in commerce. You can read some samples of what is being said in the press;
We have a question.
Why NFC for transactions?
We agree that NFC could be a big deal. NFC offers the promise of great benefits. One such benefit is a promise of secure transactions without a physical card or other payment type. Another promise is the speed to integrate with merchants who have already adopted contact-less readers at their point of sale or are willing to incorporate them as a new offering.
Still, we’re struggling to find the differentiated customer benefits of NFC for transactions. Secure payments from mobile devices are already possible without NFC. Of course, NFC is not just for payments. The technology will provide another great input and interaction point for bridging the online and offline worlds for consumers in the way mobile codes (QR), for instance, do today.
How can merchants benefit from adopting the ability to transact with NFC enabled phones? The answer to this one is eluding us, as well. Special offer delivery at the time of transaction? NFC is not the only path to making that a reality. It’s not going to make the cashier lines move faster. It’s expensive to integrate especially if you don’t already have contact-less readers. Merchant fees for NFC transactions are higher than the most platinum, signature, rewards laden credit cards. It seems that the only motivating factor for retailers to enable NFC at point of sale is hypothetical future customer demand.
We’re lacking a customer benefit. We’re lacking a merchant benefit. Yet, NFC is coming. Why is this train coming with such force? Who will benefit?
The real beneficiaries of NFC seem to be phone OEMs, carriers, and payment networks who provide the readers. By pressing NFC, these groups of companies stand to benefit by being involved and relevant in the transaction process. It gives them an opportunity to act as a hub to skim a percentage from each transaction, a path to selling more contact-less readers, and/or to leverage the data. Who helps provide this new revenue? Customers.
Why NFC? Are we missing the real problem NFC is solving for customers?