How would you feel if instead of handing your credit card to the cashier you just wave your mobile phone close to a device that reads your bank details and makes the payment for your goods? That’s what NFC chips are used for — they turn a simple mobile phone into a credit card, an electronic wallet.
We’ve heard so many rumors that Apple are going to feature near-field communications (NFC) technology inside their next gen iPhone 5, but many of them turned out to be just that, rumors.
In the meantime, Google is said to have joined hands with MasterCard and Citigroup to trial ‘contactless’ payments in America on smartphones running the Android OS.
Google’s involvement into mobile payments is actually an effort to boost the company’s advertising business — Google won’t get anything from transaction fees but will instead (when the system will be in place) be able to offer retailers more information about their customers and help to better target them. With ads they’ll have to pay for, of course!
Having insight into consumer-spending behavior, Google would be able to offer their services to websites like Groupon, Facebook or Yelp who would be greatly interested in such data; for example if certain ads led the people into the store and if they bought the advertised product, or not.
“Because it’s contact-less there’s a perception people can grab it from thin air, but it’s actually a more sophisticated technology than credit cards with a magnetic stripe, making it more difficult to steal a consumer’s payment information,” said Nick Holland, a mobile-transactions analyst at Yankee Group.
If the trial system with MasterCard and Citigroup proves successful, other banks or card issuers are likely to adopt it even if NFC technology is
Considering that in the US there are 70 million contact-less devices (that includes credit and debit cards) and 150,000 contact-less readers to process payments, it’s no surprise that the market for mobile payments will reach a whopping $618 billion by 2016. And Google, Apple or Research in Motion Ltd. would definitely want in to at least taste that pie.
Do you think we’ll get to use our phones as credit cards any time soon?
(image courtesy of cosari)