NFC Payments: no thank you?

By | May 9, 2012
While I think Mastercard's index needs to be taken with a grain of salt – Mastercard is a very traditional company – they do have a point that NFC payment technology may not be ripe just yet. I know that online tech media strongly backs NFC introduction into the mobile transaction niche, but I also know that some entire security research departments are vehmently against NFC introduction into the consumer sector.

Just for contrast, another very large and traditional organization – Sparkasse – is intent on introducing NFC payment to the German market. Whether or not they succeed is going to be an interesting story to watch unfold, as they face quite a number of hurdles ahead in successfully rolling out their new system, dubbed giroGo. They face many hurdles, including:

1) wrong target population – given the number of seniors who prefer paying with cash over anything else, I just don't see many grandmas in the mood for demanding mobile payment conveniences.

2) proprietary protocol – the protocol is proprietary and only for bank cards. The smartphone generation is more eager to use their phone for managing an electronic wallet than carrying around that plastic bank card with them. Unless the protocol is opened up, that won't be happening anytime soon.

3) uncertain merchant acceptance – whether merchants will want to install NFC readers for this proprietary system is unknown.

Either way, for the time being I'd prefer not to have an NFC-compliant system in my pocket. I'm not convinced that a cunning thief installing a payment collector at a convenient location (e.g. where people typically rest their wallets or handbags at an ATM) can be effectively avoided. I'm also not convinced that NFC range is sufficiently small to prevent a network of carefully laid out readers from tracking my movement. As to security? I'd trust them about as much as I trust cloud computing – not 100% failproof, but enough to work most of the time. 

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One thought on “NFC Payments: no thank you?

  1. Dave Grega

    Here in the US, PayPal is really trying to push NFC. They've signed up a couple of national chains to install NFC receivers in all their stores. The problem? Virtually no phones in the US have NFC transmitters :/.


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