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30 August 2010
Over the last month, the U.S. market has been flooded with stories about major developments in the mobile NFC payments space. These have included the "outed" rumors of a joint venture among AT&T/T-Mobile/Verizon, Apple's hiring of a senior manager with an NFC background, and the revelation that BofA will test mobile NFC payments along with Visa & Device Fidelity in New York starting next month. These stories are indeed interesting from a payments analyst's perspective, as they all deal with major companies, some of them disruptive, that could possibly "move the NFC needle". Despite this, these news stories all leave me wanting. In particular, I am waiting for some insight on how these companies expect their mobile NFC payment solutions to be better than plastic cards. Oh, I expect we'll be hearing shortly about how convenient these new solutions will be, their cool factor, or how relevant they are given that consumers are more likely to carry mobile phones than wallets. However, what I will be listening for is the real product story (if there is one) -- the meaningful, sustained incentives that these players' mobile NFC solutions will provide to consumers. Free airtime from AT&T? Free iTunes downloads with Apple? "Keep the Change" bonuses from BofA? If the discussion centers on new players and their NFC solutions, these stories really don't have a ton of depth -- previous NFC pilots around the world have shown that the technology works and new entrants aren't going to prove anything new. What would truly be newsworthy would be industry players' credible explanations of why they think consumers should care.