NFC payment plans face detractors as tech comes to U.S.

Google Wallet is here, Isis Mobile Wallet is coming; both must convince skeptical Americans that mobile payments are safe

By , Computerworld |  Networking, Google Wallet, NFC

"If NFC shows up in a big way on lots of devices and point-of-sale terminals -- and that's a big if -- we'll work with it," Yankovich said. "We're already doing the promise of NFC right now, today, so to us it's not a threat."

Online Internet-based purchasing from PayPal alone grew from $750 million four years ago to $4 billion in 2011, said Hill Ferguson, senior director of PayPal's mobile division.

About 14% of all e-commerce sites have a payment tool from a mobile device, and some retailers are able to attract new customers through the mobile channel.

"There's a lot of opportunity in mobile commerce," Ferguson said.

At the conference, Google showed off NFC capabilities that use of Android Beam technology to go beyond mobile payments. For example, Google partner Wyse Technologies demonstrated file transfers initiated by NFC-capable devices.

Also, MWC sponsor GSMA showed how an NFC-ready phone could be used to unlock a car or start its ignition.

Nav Bains, GSMA's expert on mobile NFC services, said 40 carriers and members of the trade group support a plan to put NFC security on SIM cards. The supported approach would give users the ability to remove the SIM and use it in another phone, along with the wallet security information.

Other possible security approaches include embedding the security (known as the secure element) into a phone's hardware, or putting it on a phone's micro SD card.

Representatives for wireless carriers Telecom Italia, France-based Orange and South Korea-based KT appeared with Bains and endorsed the GSMA's SIM-based security approach for NFC phones.

To date, though, Americans are not widely acquainted with SIMcards, partly because Sprint and Verizon Wireless have large customer bases that use CDMA and have never used GSM phones with SIMs, noted Andrew Borg, an analyst at Aberdeen Group.

The question of how security is incorporated into a phone isn't expected to squelch growth of NFC payments in the U.S., but could play a role in how fast it gains popularity, Borg said.

Perhaps when Apple enters the NFC payments field, Americans will warm up to the concept, Bains and Borg said. But for now, Borg wondered, what will make NFC payments more compelling than other ways to pay?

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