NFC Success Not Assured, But Don’t Bet Against It

In this Bank Innovations post, JJ Hornblass points out that the Isis JV of AT&T, Verizon, T-Mo, Discover and Barclays is not assured of success on its own or as a guaranteed driver for NFC in general. There are plenty of competing mobile payments approaches out there, from bill to phone schemes like BilltoMobile to Visa’s Device Fidelity-based microSD approach. By June 2011, nearly everyone expects the iPhone 5 to be NFC equipped.

No one should be surprised that things are going to be messy for awhile. We are entering a Balkan Gardens period where factional fighting across walled gardens will break out from time to time. Access to the NFC capability in the next generation of smartphones may only be made available to walled garden inhabitants.

Incompatible form factors, limited access, reduced functionality and other roadblocks are typical for new technologies. The early NFC landscape may be particularly balkanized given the high stakes involved across so many different entities. But these are speed bumps over the life of a technology and the road will flatten, smoothed out by competition. We just don’t know who, or what, will be driving down the road and who will be under the winner’s wheels.

Dedicated security and authentication hardware is always better than software. Convenient, exciting user experiences and workflows are made possible by NFC. NFC is coming and to stay.

The news of the day in payments is certainly that Verizon Wireless, AT&T Inc. and T-Mobile USA are participating in a venture, dubbed Isis, that will compete with credit card companies by using near-field communications (NFC) technology to allow for point-of-purchase payments with the wave of a phone in front of a scanner. Most of the coverage so far presents Isis as a key turning point for mobile payments, and indeed it might be.