NFC smartphone payments taking off? Not so fast

Don't cut up your credit cards just yet. NFC mobile payment systems aren't coming to smartphones as soon as you think.

By Peter Suciu, PC World |  Mobile & Wireless, ecommerce, Google

Waving your smartphone to board an airplane has practically become an everyday event, but if you want to buy a cup of coffee before the flight you might want to have cash or a credit card handy. The momentum of mobile payments is actually slowing down rather than surging ahead, according to a recent study from ABI research. Perhaps there will be better luck next year, when mobile payments will take off, ABI says.

And one reason--as Google NFC team members made clear at the Google I/O conference earlier this month--is that Android Gingerbread can supply third-party APIs to Near Field Communications (NFC) capabilities, but does not support NFC APIs for card emulation, including mobile payments.

In other words, Gingerbread can't act as a true credit card because it can't actually send information to a terminal. Rather, when the chip comes within the radius of the terminal, it sends out a signal and provides payment details. Thus it is passive, and powered by a card reader.

Even the next release of Android, codenamed "Ice Cream Sandwich"--unveiled at Google I/O and likely to launch at the end of this year--will not support NFC APIs for mobile payments.

However, this is apparently not deterring Apple or RIM from including NFC technology in future iPhones or BlackBerries. Microsoft will also likely add NFC to Windows Phone 7. For now, only Sprint's Nexus S 4G smartphone is compatible with Google Wallet.

NFC technology has become almost commonplace in many parts of the world, and it had been expected that the embedded payments system would catch on this year.

Last November Google Chief Executive Eric Schmidt showed an Android-powered mobile phone at the Web 2.0 conference in San Francisco, and suggested that it could replace a credit card.

But even if you build it, there is the question of whether consumers will trust it. Security and privacy remain key issues.


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