Why tap-and-go isn't taking off: the limitations of NFC

It's impossible to deny the surge of interest in m-commerce, which is set to intensify over the coming months. ABI Research predicts that the mobile shopping market will grow to $119 billion by 2015 worldwide, but how will retailers implement the right technology to enable mobile payments?

One of the front runners is Near Field Communication (NFC). This is not only good for quick and easy payments on the move; retailers can deliver advertising messages, coupons, promotions and loyalty programs directly to mobiles as well. However, while this is a step in the right direction for mobile payments, particularly for low-cost items, there are a number of limitations that this technology brings which need to be carefully considered.
For retailers, there will firstly be implementation costs when installing NFC terminals in-store. To add to this, the mobile devices themselves will need NFC-chips built-in which will not only take time to develop, but also exclude people who don't have the latest handsets. Simply focusing on smartphones is a narrow minded approach to m-commerce. There are also security concerns, as we saw recently with Google Wallet when it was found that account details could easily be hacked into and changed. Amidst all the hype, there is also a battle brewing in the industry to determine which organisations will handle the payment process with retailers, as mobile operators and banks are competing for a slice of the mobile payments pie. But, is there really room for all these players to make profits from this technology?

This article will outline the pros and cons of NFC in the retail world and suggest that alternative, cloud-based payment methods will be a more successful approach. With the cloud, mobile payments can be made on any device, across any network and with any merchant or bank a true enabler for m-commerce, which can help build customer trust and loyalty for today's retailers.

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