Its good to see a little bit of push back to the recent hype around NFC mobile payment solutions. When I wrote the “No mobile wallet in 2011” post back in December I highlighted several key issues, the main one being point of sale infrastructure. In a post today at Techcrunch, Erick Schonfeld talks about that as well as consumer behavior problems, merchant issues and the elephant in the room, credit card companies.
I realize Verifone’s recently stated commitment to have all new POS devices NFC enabled may seem like a watershed event but there is a ton of existing hardware in the field that’s not going to get upgraded any time soon. So Google and Apple can put NFC chips in everything but if there is no POS equipment its pretty much useless.
Eric points out the other problems:
“Waving a card (or phone, for that matter) over a reader is not a huge improvement in ease or convenience to simply swiping a credit card. Credit cards work. More importantly, people know how they work. They are not going to stop swiping and start waving without some incentive to do so.”
“In the end, merchants only care about two things: speeding up their checkout lines and cutting costs. Mobile wallets will fail on both those counts. Without getting merchants on board, mobile payments will be a bust.”
Eric saves most of his powder for the credit card companies. Since I started blogging in 2005 I have followed the many NFC trails by VISA and others. They never went anywhere and its easy to understand why.
“The credit card companies don’t want to be shoved aside by new payment systems. They will fight tooth and nail against adoption of these technologies or insist that the payments be tied to credit card accounts. But even if your iPhone becomes tied to your Visa account, credit card companies still lose. Right now, their brands are very tangible things that you keep in your wallet and hold in your hands. Their brands are front and center every time you pay with your card. But once they are relegated to the status of an app on your phone, they won’t seem nearly so important.”
That, exactly. Credit card companies have never had a real interest in NFC but now are integrating the chips into their credit cards because they have to. There is a lot of spin coming from them concerning the “enhanced interactive experience” available through NFC enable credit cards but its all bullshit.