The tech world is abuzz today with news of an upcoming service from Apple–this time, it’s mobile payments via NFC (Near Field Communications), a technology that uses short-range wireless signals to carry out a financial transaction. This is, in other words, the fabled process of waving your mobile phone in front of a scanner at the till to pay for your groceries. According to a report in Bloomberg, Apple is planing to add NFC chips to the next-generation iPad and iPhone.NFC technology is nothing new. Google has dabbled, while Nokia has been working on NFC for years. Last June the world’s biggest mobile phone maker said that all its smartphones launched in 2011 would be NFC-enabled. So expect it to be in Nokia’s upcoming E7–due in the first half of 2011–though a hack into the current C7 found the device already had the relevant chipset embedded. It is expected to be activated with a future software update.
NFC technology is also being rolled out across the United States by Starbucks, whose mobile barcode-based service works with a free Starbucks Card Mobile App for the iPhone, iPod Touch and certain BlackBerry smartphones. The only place where NFC is being used for mobile payments widely is in Japan, where millions use it via NTT DoCoMo.
A spokesman for Nokia did not want to comment on Apple’s plans, but Nokia’s new chief executive, former Microsoft exec Stephen Elop, will be addressing industry analysts for only the second time on Feb. 11 and may have something to say on the matter then.
For now, however, Nokia has to endure with the sort of NFC-hype it has never been able to generate, despite its best efforts to invest in the technology.
Ewan over at Mobile Industry Review says that “once Apple integrates NFC into their devices, it will be game over for every other provider in the marketplace.” He points out that it doesn’t matter if there are a good few billion people in the world who will never be able to afford an iPhone — they are outside the United States. And while Apple isn’t commenting on its reported NFC plans, Ewan expects that the commentary from Richard Doherty, director of consulting firm Envisioneering Group, inBloomberg’s news report today was, one way or another, authorized by Apple.
Does Nokia even stand a chance of beating Apple in the NFC mobile payments arena? It may be unlikely, thanks to Apple’s marketing prowess, intuitively-designed software services and dominance in the United States. Also, while Nokia has a range of different smartphone devices that it would need to update with a new NFC chipset, Apple has just one: the iPhone, along with the next-generation iPad and iPod Touch.
That said, Nokia is releasing an API (application programming interface) for NFC this year, according to mobile technology consultant Julien Fourgeaud, and it also has the advantage of having tested its NFC infrastructure.
But Apple may also be invading the space colonized by credit card and payment system providers MasterCard and Visa, by offering heavily-subsidised, or even free NFC payment terminals to merchants, to work with the service embedded in its mobile devices. It is unclear if these payment terminals will work with devices other than those made by Apple.
“Alas, MasterCard, it’s not your game any more,” writes Ewan. It might not be Nokia’s either.
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