Apple has overlooked near-field communication (NFC) for its new iPhone 5, but it won't stymie the growth of NFC contactless payments, according to Datacard director of mobile solutions business development Sebastien Tormos.
He was speaking at the Mobile and Contactless Payments Australia conference in Sydney today.
Pundits previously said that if Apple released an NFC-enabled phone, it would be a giant leap for the adoption of the contactless technology. There was speculation that the iPhone 5 would include the necessary hardware, but those rumours were proven wrong when the phone came out last week.
Datacard deals in payment cards technology for financial institutions, and has been involved with NFC contactless payments for some time.
While iPhones still have a large share of the global handset market, Tormos doesn't consider the iPhone 5's lack of support for NFC as a huge barrier for the contactless technology's widespread adoption.
"If we think about the market forces right now, Android smartphones are going extremely strong, and NFC technology has got endorsements from technology vendors," he said. "I'm not too concerned, especially with bridging technologies available."
Those bridging technologies include NFC sleeves for the iPhone 4, with Datacard planning to launch one for the iPhone 5 as well.
Banks have continually issued contactless payment debit and credit cards to consumers. While there is yet to be a widespread adoption of contactless payment methods, the growth rate has been encouraging, and is contributing to the acceptance of NFC as a payment technology, Tormos said.
He sees a future with virtual payment cards that can be loaded instantly on an NFC-enabled phone, with customers able to simply tap their phones on supported terminals to make small purchases. It would also make issuing payment cards to customers easier and faster for banks.
While NFC phone adoption has been growing steadily, most people either still don't have an NFC phone, or do not know how to use one, according to Tormos, and applications also need to support NFC. Commonwealth Bank has yet to enable NFC on its Kaching Android app, because, the bank claims, NFC Android phones don't have the secure element activated.
Westpac has overcome this issue by including a secure element on the SIM cards of the Samsung phones that it is trialling. The problem with this method, Tormos said, is that banks are forced to deal with telco providers that could charge a small fee to issue SIM cards, and may have to involve trusted service managers (TSMs) as a middleman.
Tormos said that implementing a secure element through a microSD card is a more effective way of enabling NFC on phones that do not have those capabilities, but as iPhones do not take memory cards, owners will have to continue with their reliance on NFC sleeves.
Using microSDs to enforce a secure element and enable NFC on smartphones is not new; the technology has existed for some time. But this method of implementing NFC gives banks more control over the payment process, according to Tormos.
He said that banks will need to collaborate with each other in regards to implementing a secure element on microSD cards.
"MicroSD cards won't have room for all different types of secure elements," Tormos said. "You can have 10 virtual cards on a phone with only a few secure elements, so you have to share."