NFC Is Dead, Long Live NFC

NEW YORK (MainStreet) — What a difference a year makes for Near Field Communication (NFC) technology, once considered the beacon of hope for mobile payments to allow for short-range tap and pay smartphone technology.

But cue this month's BAI Payments Connect conference for bankers in Phoenix, Ariz., and those in the know have changed their tune.

“NFC may be a non-starter,” said Jim Marous, an executive at digital marketing agency New Control.

The remarkable fact: nobody disputed Marous.

It seemed so simple: Tap the phone on a reader, done--you’ve paid. The payment would be processed through an associated credit or prepaid card. But to survive NFC may have to go through feats of herculean proportions.

Everybody, from Google (with its Nexus phone) through Isis (the payments consortium of wireless titans: Verizon, AT&T, and T-Mobile), had tapped NFC as the secure way to let smartphone owners pay with the phone instead of a swipe of a credit card. A few years ago it seemed just a matter of connecting some dots, especially in infrastructure, before NFC became a marketplace reality.

Flashforward to 2013, and NFC is available on only a few dozen phones--meaning it is in few consumer hands--and it is not on iPhone. Nor is it, as far as anyone knows, on the iPhone roadmap for near-term deployment.

Merchant adoption of NFC readers also has lagged, with only a handful of national retailers (and few local stores) offering the capability. Even if you have an NFC phone, there is nowhere to use it to pay.

Thus the Marous skepticism and the mounting sense that NFC is dying.

But then there is the other side of this story, because - quiet as they may be - there remain NFC supporters, plenty of them.

In Barcelona, at the sprawling Mobile World Congress in late February, Diarmuid Mallon, an executive with SAP, surveyed attendees about NFC’s future; he found 28% of them still saw an NFC type connection as instrumental in nudging mobile payments into mainstream adoption.