NXP At Cartes: NFC-Based Mobile Payment Is ‘The Future’

Based on a groundswell of optimism surrounding Near Field Communication payment applications on display this week at the Cartes & IDentification conference in Paris, executives at NXP Semiconductors are eager to counter criticism from some quarters that NFC is too complex and bank-centric to catch on widely.

Bullish new forecasts for shipments of NFC devices announced this week at Cartes and “the momentum we see here assures us that NFC is the future for mobile-payment development,” Jeff Miles, NXP vice president of mobile transactions, told PaymentsSource Nov. 16 in a telephone interview from Paris.

NXP manufactures chips and other NFC-related products, so it has a vested interest in seeing the technology thrive.

Eurosmart on Nov. 15 said it expects NFC-device shipments to increase 50% next year from this year’s total as more handset manufacturers begin incorporating the technology into mobile phones (see story). 

Certain industry observers in recent weeks have said industry expectations for NFC-based mobile payment and mobile wallets are “overhyped,” suggesting the effort required to saturate the market with NFC-capable point-of-sale terminals may exceed potential benefits (see story).

But NFC offers the best way to harness existing banking and merchant systems to create a secure, two-way channel for banks and merchants to execute mobile payments and communicate directly with consumers through emerging channels such as social media and phones that track users’ locations, Miles contends.

“We haven’t even seen how these new technologies are going to affect consumer behavior,” he says. “NFC-based mobile payment will enable merchants to do things with coupons, receipts, loyalty, and in-store and general marketing that we have never seen before, and it will add value that will go far beyond just replicating the form factor of a card in a new way,” Miles says.

Alternative mobile-payment channels that do not specifically harness NFC, such as those PayPal Inc. is experimenting with for online and point-of-sale applications, may also develop alongside NFC, Karsten Danziger, NXP banking-segment manager, notes from Paris.

“Various mobile-payment approaches are in development, but NFC offers the best way to build on existing platforms, which aren’t going away,” he says.

Netherlands-based NXP won two of 10 Sesames awards at Cartes on Nov. 14, including in the mobility and software categories for innovations enabling commercial NFC services, including Google Wallet, which launched in the U.S. in September (see story).

In the mobility category, NXP won with its PN65 Secure NFC module, which combines a secure NFC element and controller with a JavaCard operating system and powers Google Wallet. In the software category, NXP won for its open-source NFC mobile-phone software enabling the launch of Android NFC phones.

Another payments-related Sesames winner was VeriFone Systems Inc., which won in the eTransactions category for its PAYware Mobile Enterprise technology, which enables merchants to bring mobile devices into Payment Council Industry data-security standards-compliant environments.

Dynamics Inc. won in the hardware category for its Chip & Choice technology, which enables users of cards equipped with multiple chips for different applications to load specific payment applications by pressing a button on the card.

What do you think about this? Send us your feedback. Click Here.