Contact-Less: NFC Is Good for Payments but Not Much Else

by Sarah Grotta 0

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An article about the state of NFC and contactless payments appeared in TechRadar. It has a European perspective where contactless POS payment transactions are more available, but the points the article makes about future opportunities for contactless have global ramifications. The author has some commentary on what will make the marketplace better for contactless:

Considerable work needs to be put into either improving this in-store experience, or changing the user journey so people don’t fall back into their old ways.

Jeanette Tena-Jones, VP, Payments and Loyalty at MBNA, says one of the big things needed in order for contactless payments to really take off is to get those who aren’t early adopters to feel comfortable with a different payment method – and give them an incentive to try it out.

“Future solutions will need to provide things beyond payments to become mainstream,” she says. “Integration with loyalty and membership cards is the clear choice, but that won’t be enough.”

So as we are finding with Apple pay and Android pay and other like payment apps, consistent usage is key to adoption, and that may mean extending contactless beyond a typical payment interaction:

To be properly part of our future, NFC needs to become interwoven with smart homes and connected ecosystems, where it’s currently just a novel accessory, beyond payments.

All the experts we spoke to agreed that NFC payments would become more successful when the ‘digital wallet’ becomes a reality. The technology is in a strange position – a mainstay in smartphones for years, but (beyond contactless payments, which still aren’t any more useful than a bank card) largely a luxury addition.

Overview by Sarah Grotta, Director, Debit Advisory Service at Mercator Advisory Group

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