"Alternative" Near Field Communication-enabled devices such as watches, tags and tokens-in short, devices that are not mobile phones-are technically feasible but often lack strong business cases, according to a recent paper from The Human Chain Ltd., a British consultancy.

Its report "Alternative NFC Form Factors" contends some nonphone devices capable of NFC contactless payment and downloads "may become niche solutions within certain specialized sectors." The report adds that "as with all consumer electronics, critical mass is key, and it seems that none of these [devices] will gain this in a realistic time frame."

Large commercial NFC deployments have yet to emerge, largely because of a lack of NFC mobile handsets and the complexities of running a contactless-payment scheme that might involve issuers, transit agencies, retailers and mobile-network operators, observers say.

Some vendors have introduced stickers designed to be affixed to phones and imitate NFC transactions. Full-fledged NFC relies on the contactless application residing inside the mobile phone.

Stickers have "significant commercial and technical advantages over other form factors," the report says, noting that start-up costs generally are lower and time to market is quicker. "The stickers can be produced and branded in the same way as a current contactless card," the report says.

Still, a scheme that relies on such stickers leaves mobile-network operators with virtually no control or major revenue stake in the so-called NFC "ecosystem," and stickers remain more expensive than "traditional smart cards," the report says. Costs likely would increase for stickers with loyalty and Mifare-backed transit applications, the report adds.

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