Near Field coming Near You

Even though Near Field Communications (NFC) has been around for 15 years, it could become mainstream in the U.S. smartphone market this year. NFC operates at 13.56Mhz and at speeds from 106 kbits/s to 848 kbits/s all within a 4 cm range. We are finally catching up with Japan (e.g., Osaifu-Keitai system) and other areas of the world where NFC is used for mobile commerce and payments. With better software integration, you now have the intersection of context, proximity and event handlers that blend the physical and virtual worlds. It would make sense if Google announced a mobile payment platform since NFC is natively supported in Android 2.3. You have to consider other players with a little more "trust" than Google such as Apple iTunes or even Paypal. Merchant players like First Data or GPN are reluctant to adopt an offering that is not industry standard. MasterCard and Visa have made progress raising consumer awareness for NFC but financial institutions are not good catalysts for ecosystems. Even though NFC silicon can be standardized, individual competitors that bring their own implementation of payment systems can stall adoption and create payment silos. The battle will be which model will prevail - operator-centric, bank-centric, collaboration-centric or peer-to-peer-centric. Perhaps it doesn't matter since once a user has selected a smartphone platform, they automatically get the mobile payment system. Otherwise we would need a system like "payment roaming" similar to what evolved during the early expansion of cellular networks and billing systems.