Power of NFC: A Look into the FutureSteven Paese |
Well in advance of the acceptance side, mobile devices are already and/or planned to be deployed with NFC capabilities. This is mainly due to NFC’s attractiveness impacting many different industries. In regards to payments, NFC enhances value-added services like loyalty and coupons; as for other aspects of online connectivity, the possibilities with NFC are endless.
One could imagine future products and services like virtual keys (home, work, car, hotel) or environment settings/preferences (temperature level, lighting, seat settings, music preferences)—all driven by NFC. While payments represent an important opportunity for traditional and non-traditional players alike, traditional players such as issuers and acquirers should make strategic alignments with others that cross over into the payments industry for acceptance preference and new product development.
While inclusion of NFC lays the foundation for future payment scenarios, it provides immediate impacts like instant content transfer, e.g., music playlists or pictures. Having the ability to “flip a switch” to enable NFC mobile payments is critical. It is also important for issuers to reap the benefits by being a “fast mover” including securing early adopters and generating new revenue streams.
Issuers should not wait for universal NFC adoption on the acceptance side (terminalization) before they embrace the technology.
That would mean waiting for hardware. Banks shouldn’t can’t wait for NFC payments (which means waiting for terminalization) in order to embrace NFC. Imagine if, for some reason, mobile banking had hung fire, waiting for the perfect mobile phone before putting any kind of financial services onto a handheld device. As it is, it’s an average two-year replacement cycle for mobile phones. The banking industry couldn’t afford to wait—consumers were way ahead of them. How much business would be in jeopardy or lost because of this delay? In the coupon industry, look how quickly new companies were formed and are already changing business models to incorporate other aspects of the value chain like acceptance or data-driven analytics.
Change is a must.
Topics: Payments Strategy