The hardware works, and consumers worldwide think it's a cool idea. Still, near-field communication chips have made about zero progress morphing mobile phones into contactless payment tools.

Longtime financial industry backers of NFC technology concede that creating an entirely new payments system has been much harder, and taken much longer, than they had anticipated. But they remain convinced that the concept will eventually become a reality.

"It's been longer than I want to admit," says Dave Wentker, a senior business leader with Visa Inc. and its head of proximity payments. Though market researchers have issued plenty of optimistic reports in the past, promising that NFC phones would be common by now, "it's fair to say that early analyst projections were definitely overstated."

Visa has long promoted the mobile-wallet concept, in which phones store details for multiple payment accounts. Consumers can use the NFC components to make a contactless purchase at the point of sale (the same technology used in contactless payment cards.) But as the concept evolved, payments executives realized that NFC could also be useful in other industries - the same technology could enable people to gain access to offices, download information about specific products at a store or board airplanes.

For financial services groups, it was too much of a good thing. The more other industries took an interest in NFC, the harder it was to develop a universal set of standards. Wentker said the NFC Forum, an industry group, is expected by yearend to begin a certification process for NFC standards, one of the final steps before mainstream NFC products could hit the market.

In the meantime, other mobile-payments concepts are gaining traction, and some executives say they could be easier to deliver than NFC. NFC "absolutely is not required," said Kevin Grieve, CEO of Mocapay Inc. Mocapay, of Boulder, Colo., offers a retail point-of-sale payments system using text messages, a capability that comes standard in almost every phone.

In contrast, delivering NFC requires handset makers to install NFC chips, wireless carriers to make their networks compatible with the technology, financial companies to offer payments applications and for all three industries to cooperate - a tall order. "It just doesn't make economic sense," Grieve said. Text-based payments received a huge surge in public attention in January, after Americans used their phones to contribute more than $20 million for earthquake relief in Haiti in the first week after the disaster, noted Red Gillen, a senior banking analyst at the Boston research company Celent.

To be sure, consumers are using phones for mobile payments in tech-savvy markets like Japan and South Korea. But Gillen says those applications are all closed-loop systems, such as mass transit, rather than general-purpose credit or debit accounts. The longer NFC takes to find its place in the market, the less likely it is that it will find a place at all, he says. "If you keep talking about something for too long and don't do anything, then other technology is going to pass you by."

James Anderson, MasterCard Inc.'s vice president of mobile product development, said two major NFC projects, in France and the United Kingdom, are inching closer to reality. Though he would not say when they could go live, both involve widespread, commercial availability of general-purpose, open-loop NFC payments and are backed by some of the biggest players in banking and wireless services in the region.

"This is not a technologically easy process," Anderson says, but "the train is definitely moving."

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