Is NFC dead or is it just starting to get traction?

Paul Knight

Paul Knight, Chief Product Officer at Blue Bite (2014-present)

Répondu il y a 12w

With over 4 years experience developing NFC applications I believe I am uniquely positioned to answer this question.

Introduced in 2002 by NXP, Sony, and Nokia, Near-field Communication or NFC brought contactless data transfer to low power mobile devices. Today NFC is standard hardware on all major smartphones making the technology easily accessible, and ripe for growth.

NFC adoption started to take off 10 years later when smartphone manufacturers started to introduce the technology to their flagship devices. Notably Samsung advertised the NFC capabilities of the Galaxy SIII smartphone through NFC enabled posters where owners could tap to receive an exclusive song download. The campaign saw great success as it played into the lack of NFC support on iPhone.

From 2012 to 2014 NFC had been adopted by all major smartphone manufacturers except Apple. While many companies saw the potential of NFC during this period they were hesitant to adopt the technology as the iPhone held a significant market share in the United States. This lead to slow growth during this time period. That changed in 2015 with the announcement of the iPhone 6s. With limited support Apple kept NFC locked to Apple Pay until the 2016 introduction of the iPhone 7.

The iPhone 7 ushered in a new era for NFC with a number of companies including: adidas, Nike, et DYNE adding NFC tags to their products. With NFC becoming the number one technology driving the internet of things.

Research global markets projects NFC growth of 21% year over year reaching a market value of $23.8 Bn by 2023 (paywall).

Based on this history and projected growth NFC holds great potential with early adopters seeing the largest returns.

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Full disclosure: I head up the product team at Blue Bite where we use NFC to power smart products. For more information on NFC see: The Complete Guide to NFC.

Ben Mag

Ben Mag, Founder of Codemason

Répondu il y a 241w

I think this is a classic example of a hype cycle.

Is NFC dead or is it just starting to get traction?

This Gartner Hype Cycle is from July 2013. As you can see, NFC has entered the 'Trough of Disillusionment' phase. In this phase, interest starts to wane as previous experiments don't live up to expectations or fail.

When you compare it to the previous stage where expectations were at their peak and the innovators who walk among us couldn't help but to daydream about how these tiny little chips could change everything, it certainly feels like it is dead.

However, I'd say its far from it. NFC will soon be entering the 'slope of enlightenment' where it's value starts to become more widely understood and start to gain more traction. When NFC reaches the 'plateau of productivity', you will see mainstream adoption and can expect to see it integrated deeper and deeper into our lives.

Brian Roemmele

Brian Roemmele, Alchimiste et métaphysicien

Répondu il y a 242w · Voté par

David S. Rose, Founded six startups, two angel groups, three funds, and funded 100+ ventures. CEO of Gust, Founder… · Author has 1.3k answers and 11.9m answer views

The Land Owner Gets To Choose What Gets Build On Their Land

It is always interesting to see this question. In most cases here on Quora it is seen through the lens of the smartphone as a wallet. That is only one single aspect of NFC and the prospects it has for the future.

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The more concise way to see this is to view the ecosystem through a simple analogy. Visa, MasterCard, American Express and Discover, in this analogy, they are the land owners, it is that simple. They own all aspects of what can and can not be built on the land they own. More specifically the payment card companies have already began building EMV and Wireless EMV (NFC) developments and it has little to do with smartphones.

By The End Of 2015 Just About Every Payment Card Holder In The US Will Have An NFC “Device”

How will this development take place? It has already begone, your payment card will be updated by the end of 2015 and will include a triple technology in a single card:

  1. Magnetic Stripe (end of life planned for 2016)
  2. EMV Chip (with and without PIN requirements)
  3. Wireless EMV (otherwise known as NFC)

Is NFC dead or is it just starting to get traction?

Specimen of the modern US Payment Card. Including EMV (gold area), Visa payWave (NFC) and magnetic stripe (on the back).

The “Post Target Breach” World

In the “post Target Breach” world, the payment card companies have accelerated the move to EMV by not only making this clear in the media, they are also urging all card issuing banks to replace cards much earlier. At the same time political pressure and the very real prospects of laws mandating EMV and end to end encryption is also at play.

This is very clear with how Target was brought in front of the US Senate to explain what happened. They responded that they are moving to EMV and wireless EMV by the end of the summer 2014 [1]. This is clear in the way that Target CFO, John Mulligan spoke the Senate Judiciary Committee:

“We believe that chip-enabled technologies are critical to providing enhanced protection for consumers, which is why we are a founding, and steering committee, member of the EMV Migration Forum at the SmartCard Alliance."

Mr. Mulligan went on to state that the Senate should examine the current laws to see if adoption could take place faster for end to end encryption. I can personally state that I have had numerous conversions with researchers that are working on assisting the writing of a number of Bills to mandate this. Thus it is absolutely certain that all of these issues will force merchants to update payment card terminals to accept EMV and wireless EMV.

The payment card companies have also made it very clear recently with an unprecedented historic dual announcement about the future of NFC [2], [3]. I think this Visa quote is very clear:

Visa today announced it is offering clients new options to securely deploy mobile payment programs, including for the first time an option to host Visa payWave-enabled accounts in a secure, virtual cloud. The move expands Visa’s support for mobile payments globally and will give financial institutions greater choice in offering consumers secure ways to pay with smartphones. [3]

The point here is not only will EMV and NFC be built into you payment card, it will be built into your smartphone. Clearly this will be in the Android release of Kit Kat. However more importantly it is going to be material to the iWallet solution from Apple. I covered this in a recent posting, How An Android Secure Element Replacement Is Really An Apple iWallet Story [4]. Apple is in a ready position to integrate: TouchID, Secure Enclave, NFC, Magnetics, WIFi, BLE and Cellular in to a system that will be far more useful for the consumer, yet compatible with any merchant and any merchant account.

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Is NFC dead or is it just starting to get traction?

Specimen patent image of how Apple will deploy NFC.

The Pointless Debate

Thus when one has this debate about NFC it is really a pointless and academic debate. NFC devices will be in the hand of every payment card holder in the US in short order. Merchants will be compelled with new payment card rules (they are on the way) and federal laws (they are on the way) to upgrade payment card terminals. In most cases these devices will cost less then $99 to retrofit on to most payment card terminals. In other cases, leading payment card companies will place these upgraded, multifunction terminals at no cost.

Is NFC dead or is it just starting to get traction?

Specimen of a free placement of multifunction EMV, NFC and magnetic stripe payment card terminal.

You Can Not Disrupt The Land Owner With Unsupported Buildings On Their Land

From this point on when you hear about this debate, sometimes from some of the most informed people in payments, hold back the chuckle on how much they have missed in their arguments.

I have had to endure this for the last 5 years, primarily from startups that were told to ignore EMV and NFC and to “disrupt” payments. I have advised a number of paths that would have positioned these startups in a place that would be far better then the place they are today. You can not “disrupt” the land owner by building your beautiful development on their land without them fully supporting you. Today many of these companies are just now fully understanding this and the lost time and money not seeing what is now obvious.

How Much Faster Can A Transaction Get?

Does this all mean that NFC will gain traction? Of course it will. The technology will be built-in on every payment card and all new smartphones in the next year. The merchants will be have the devices in place by rule or law. Given the option as a consumer to place your card in the EMV device or just tap it, what path will you take? Perhaps more the better if your smartphone is already in your hand. How much faster can a transaction take place?

Thus when NFC was just a technologist dream a few years ago, it was in a coma and assumed dead. However there have been a number of very real and important convergences that will show that in the US NFC is very much alive and there is little doubt that we will see NFC “everywhere you want to be” [5].

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1 Target Tells Senate It's Speeding Up Plans to Accept EMV Credit Cards
2 MasterCard to Use Host Card Emulation (HCE) for NFC-Based Mobile Payments
3 Press Release | Visa Corporate | Visa Inc.
4 Comment le remplacement d'un élément sécurisé Android est vraiment une histoire Apple iWallet. de Brian Roemmele sur Accepting Payments
5

Matthew Caston

Matthew Caston, Partenaire, PCC. LLC | Angel | La graine | Conseil

Répondu il y a 233w · L'auteur dispose de réponses 644 et de vues de réponses 761.2k

Ben Brown is right on the timeline; and, NFC's not dead. There will be 2 primary drivers for NFC's adoption on devices (not cards.)

1.) Payment industry specifications for NFC enabled cards and infrastructure. Standards will speed adoption.
2.) Contactless inertia driven by competitive protocols (BTLE) and; the use of NFC and BTLE in non-payments related capacities.

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1 is mandate driven (look at Target's accelerated adoption); and, 2 is behavioral - as in - pulling your phone out to unlock a door; enabling BT to receive valuable offers; phone/app as payment (think SBUX)

Card swiping is so engrained for most of us that moving to contactless, or even Chip/PIN is a foreign as driving on the other side of the road.

Target Tells Senate It's Speeding Up Plans to Accept EMV Credit Cards

Burak Ilgıcıoğlu

Burak Ilgıcıoğlu

Répondu il y a 170w

NFC was supposed to boom back in 2007-2009, but the mandatory involvement of Mobile Network Operators (owners of the Secure Element back then) made the products impossible to use for customers. Enrolment and payment experience was a nightmare. As a result, none of the MNO involved products survived.

After the buzz, Google introduced HCE (Host Card Emulation) support for Android. HCE is simply the emulation of the plastic card via software. This is not secure enough for the financial world, so tokenisation was also introduced by the payment regulators. Tokenisation refers to limited use of alternate card numbers, linked to actual card.

Apple also developed Apple Pay with iPhone 6 in its own ultra controlled system. Now both Apple and Google has offerings to banks and customers the opportunity to have mobile payment products. Apple part is more consistent and straightforward while Google is much more fragmented.

It will not boom definitely, but it is not dead either. In order NFC to boom, contactless payments with the plastic cards must boom. Contactless terminals are not easy to find except a few exception countries and people are not crazy about contactless payments except early adapters.

Ben Brown

Ben Brown, consultant en paiements @firstannapolis

Répondu il y a 242w · L'auteur dispose de réponses 280 et de vues de réponses 609.2k

I believe it will take off in the next 2-3 years, in combination with other technologies and potentially alternative payments on the back end, with V/MC's recent decision to support Host Card Emulation being a not-insignificant factor in this bullish view. (Without HCE, I fear NFC may have withered on the vine.)

Even if there are cool new things like iBeacons popping up, the payments industry now supports NFC. It is a feature in most every payment card terminal shipped today. This is a huge thing for a slow moving and conservative industry, and I think it guarantees NFC at least a token role alongside other tech in contactless mobile payment and value added services.

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