Mass market NFC faces hurdles

Melissa Chua
24 May 2011

The UK’s first contactless mobile payment service, Quick Tap, still faces several hurdles to turning mobile payments into a mass market reality, says an Informa analyst.

Quick Tap, a collaboration between Orange and Barclaycard, launched last week. The service allows customers to tap their mobile phone on a contactless reader to make purchases under £15 ($24.20). Only Quick Tap enabled handsets, such as the Samsung Tocco Lite, are compatible with the service.

According to Guillermo Escofet, a senior analyst at Informa telecom and media, the project’s first hurdle would be to overcome the lack of suitable NFC-enabled handsets in the market.

“It’s going to be a while yet before we get a wide enough choice of NFC-capable phones, despite interest voiced by numerous handset makers,’ said Escofet, saying the market should expect to see wrangling between various value-chain members over where the security element should be located in handsets.

Retailers’ mindsets would also have to change, said Escofet. “There is still a long way to go to convince the bulk of retailers of the business case of replacing their POS terminals with NFC-enabled terminals.”

Mobile marketing firm Kony Solutions said consumers also had to be educated on the security levels of NFC, as research conducted by the firm found security to be a key hurdle in consumers’ reluctance toward contactless mobile payments.

Describing the overall process of mass market NFC adoption as a ‘long and arduous’ journey, Escofet said the transition might be easier if large players such as Apple would launch NFC phones.

NFC payments are a staple in Japan and Korea, but have yet to gain traction in other parts of the globe, though consumers in Asia have expressed interest in the technology.

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