NFC will be worth the wait, analysts say

While it may be 3 years before NFC is widely adopted in the U.S., the tech will offer a huge boost to smartphones

By , Computerworld |  Networking, mobile payments, NFC

NFC also allows smartphones to be used to pay for items or services purchased at any vendor that recognizes the technology. The Starbucks card only works at the company's stores.

In South Korea, Japan and some European cities where NFC is widely used on smartphones, users can quickly enter a PIN and then swipe the device near an NFC terminal to signify that the amount is correct.

"If NFC were just a way to replace the magnetic stripe credit card -- which is what the barcode system is -- with your phone, than an alternative payment solutions such as what Starbucks has implemented may suffice," noted Mark Hung, an analyst at Gartner. "But it wouldn't scale very well, as you'd need a separate app for each merchant."

Beyond making payments, NFC technology allows for transmission of coupon offers, promotions and loyalty information "with a single tap," Hung added. "This is much more powerful than what can be accomplished with barcode technology."

Hung said that despite the Starbucks current success with barcode systems, its unlikely to spread to many other retail operations.

"NFC does have traction [in the U.S.] but it just takes time for there to be enough critical mass to make it interesting for merchants," Hung said. However, he did agree with Starbucks officials that it will take two to three years before NFC is widely used in the U.S.

"The Starbucks [barcode] experiment is actually a very positive development for NFC," Hung concluded. "It shows that people are willing to pay using their phones."

Matt Hamblen covers mobile and wireless, smartphones and other handhelds, and wireless networking for Computerworld. Follow Matt on Twitter at @matthamblen , or subscribe to Matt's RSS feed . His e-mail address is mhamblen@computerworld.com .

Read more about mobile and wireless in Computerworld's Mobile and Wireless Topic Center.


Originally published on Computerworld |  Click here to read the original story.
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