Why so shy on pay-by-wave, Nokia?
New site pushes NFC but the elephant is holding a purse
Nokia has launched a new website promoting Near Field Communications without any mention of the pay-by-wave systems that have got everyone else so excited.
The site lists all the things one might want to do with an NFC handset, such as sharing pictures, pairing devices and reading passive tags to get local information, but nowhere is there any mention of the proximity-payment systems which are becoming synonymous with the contact-less technology.
Nokia's current NFC phones can't do proximity payments, which may explain the company's reluctance to push that particular application, and NFC does have a host of other useful capabilities – but the lack of obvious revenue stream has pushed them into the background.
It's worth remembering that Bluetooth didn't take off until operators realised the mark-up on a Bluetooth headset was better than a telephone, and as European operators own shops they mandated Bluetooth in handsets, something that never really happened in the USA. Being able to swap business cards with a tap of the phone is fun, but it isn't making money for anyone.
Despite Nokia's reluctance to promote payments though NFC it is still presenting a public discussion on the subject next week, in with the London School of Economics. The subject is how security fears are stifling wireless payments, though we're not convinced they are considering how quickly companies (other than Nokia) are pushing ahead.
Next year's London Olympics, for example, will be awash with wireless payment systems, with Coca-Cola apparently considering NFC vending machines within the site and Visa ensuring that the venue is a showcase for its PayWave tech (and that the competitor's PayPass platform isn't in evidence).
Nokia keeps trying to remind us that NFC isn't just about payments, which is all very well and good, but the Finns are going to have to support those payment systems eventually if it isn't going to be left behind entirely. ®
"Wave-to-pay" is not a technology problem..
... as Google will discover. (I suspect Nokia already know this, as they've been trialling NFC payment systems since 2008, and have been reluctant to press ahead with it). The exchange at the payment terminal is the easy bit; after that, any operator will need to provide the same trust, accountability and security that an existing card-payment processor does, or, as Google have done, farm it out to such a company (Citi in Google's case). But now, Google are just another middleman in an industry with too many middlemen. If I were a bank, why wouldn't I just commission the software myself, and keep the margins? And I think this is what will happen.
The banks have another advantage here too: In most jurisdictions, the cashless payment systems used by merchants are owned by the banks, and provided to merchants as part of their payment service contract, so it's the banks who decide which standards are adopted, not the software companies.
In the meantime, the payment tokens that customers already hold (credit and debit cards) can be easily augmented with NFC functionality. With a transaction value cap and a rate limit, it's quite possible that banks can allow transactions without PIN (as a precedent, there are "electronic wallet" Chip cards widely used in Belgium that operate without a PIN). If this happens there is suddenly no market for a phone-based NFC system, except as an application from an existing card issuer, and even then there's a public trust battle to be won.
In surveys, people are most worried about losing their phone when asked why they don't like the technology, and this has some sense in it. Right now, if you lose your wallet, you can at least phone your bank and cancel the cards; with everything rolled into one device, that option is no longer open to you.
[ On a final point, there seems to be some misunderstanding about what Nokia's NFC phones can and can't do. Just because the current OS release does not allow payment applications, it does not mean that the hardware is incapable of this feature. The software to enable payments will be in place next year, and will work for all current phones, according to Nokia ( http://www.nfcworld.com/2011/08/29/39462/nokia-symbian-nfc-phones-to-support-mobile-payments-in-2012/ ). ]
Re: Bill Ray's Nokia meme in action
You're right - I've changed my mind over the last 18 months.
I used to think NFC was cool, but pointless. Now I think NFC is cool, pointless and being pushed really hard by some of the largest and most powerful companies in the world.
I still don't think many people today want mobile payments, but I now think they're going to get them if they want them or not, and Nokia risks getting left behind on that score.
Hope that clarifies things.
Just cos a few companies are trying to promote it, does not mean it's gonna be the way forward. Has anyone here used it yet? Does anyone care? I'm happy with cash and cards still. I don't think that makes me a dinosaur.