Near Field Communication (NFC) has been around for a while, and smartphone makers seem to be hot to get the technology embedded in their wares. Google has even incorporated the ability to handle NFC hardware right into the Android platform, starting with Froyo or Gingerbread, I forget which; Apple is rumored to be putting NFC hardware into future iPhone models. The race to NFC is hot enough to imply it will bring great benefits to smartphone owners, but the way things like this work I am not so sure it's all that.
Basically NFC enables gadgets to communicate with other equipment when brought in very close contact (4 cm. or less). The simple act of bringing two such devices together triggers a programmed function. The typical usage touted for NFC is to replace the bank cards we currently use, enabling the smartphone to become a method of payment for purchases. Wave the smartphone at the terminal and your money is transferred to the service or product provider. It looks good on paper, but I suspect it won't be that straightforward for a while.
There are a lot of banks that will have to get on board with NFC, and a standard implementation of it at that. For the customer to benefit the process has to work the same across all of these institutions for a start. Then all of the retail organizations have to embrace it equally for the process to become standard for the customer. There are so many companies involved I'm afraid this will take a very long time, if it happens at all. It can easily become a frustrating process if the NFC-equipped smartphone owner has to keep track of which retailers and restaurants accept this method of payment and which don't.
Until everybody gets on board with a standard implementation of NFC for payments, customers will still need those plastic bank cards in the wallet just in case. That's not a big deal, but it means consumers will have two things to keep track of that can be abused if lost or stolen. Many of us have seen family members, or even ourselves, racing in near panic to find the smartphone that was left somewhere while running errands. That scenario would become real panic if that smartphone left on a counter somewhere is a direct tap into the bank account.
That points out the security aspects of NFC for payments in general. There will probably be a security step to prevent abuse of the system, much like the PIN number used with bank cards today. I suspect the process will entail waving the smartphone at the terminal and then entering some security code to prove it's really you making the purchase. Not a big deal, but not really any different than what is done today without NFC.
The payment scheme is only the primary purpose that NFC can serve, I'm sure that enterprising companies will find all kinds of ways to make money off the use of the technology. Until I see what those are I'm not very excited about NFC. I suspect that it will end up being used for advertising somehow, as that always seems to be the initial push with new mobile technology. I hope I am wrong about this, as I like the idea behind NFC. I just can't get excited about it yet.
Got some good use cases for NFC that you'd like to see implemented? Leave a comment in the TalkBack to share them. I am very interested in how this tech can be leveraged.