The contactless tech took a big hit when the global retail giant declared it not to be worthwhile.
Tesco, a supermarket giant, has been making some heads spin with its latest announcement that it feels that NFC technology doesn’t have any real value, when speaking at a recent conference.
Many in the industry felt that near field communication is the next up and coming thing.
That said, they may be thinking twice about NFC technology now that the Tesco, a company based in the United Kingdom, gave such a poor assessment of it. The mobile payments industry had been under the impression that this could be the technology that would be used in order to accelerate the drive toward a cashless society.
NFC technology allows information – such as payment transactions – to be exchanged between two devices.
It works by holding the two devices close to one another, or tapping them together. The use of NFC technology also includes a security chip to make sure that data remains encrypted and cannot be read by the wrong recipient. It has been promising to become the best way to offer a range of different mobile wallet services, such as for payments, ticketing, and other similar purposes.
Many industry giants have been banking on NFC technology, including Google Wallet and Isis. However, Tesco says that this isn’t quite what it has been chocked up to be. In fact, it was suggested that it has actually come and gone, and that it won’t be progressing beyond what it has already achieved.
The company has no plans to implement the near field communications and feels that any attempt to try to use NFC technology would simply complicate things. They cannot see that it will take off in any realistic way.
In its statement at the conference, it drew attention to the fact that contactless credit cards already exist, so using mobile NFC technology based payments would not be adding any level of value. Moreover, it suggested that it would not provide any beneficial consumer experience and would simply add complexity to the checkout process. This is in direct opposition to much of the mobile payments industry that is continuing to drive forward with this tech.
Mobile payments sector seeing a decline in wallet applications
Mobile commerce is quickly becoming a major trend among consumers around the world. Many people consider mobile payments to be a simpler, more convenient way to pay for goods and services, partly due to the fact that mobile technology is so prolific. Much of mobile commerce has been powered through the use of mobile wallets, lightweight mobile applications meant to store and use financial information. While mobile commerce has been seeing strong growth over the past two years, these mobile wallets have not been growing more popular among consumers.
Wallets had been popular, but focus on NFC drives consumers away
In the advent of mobile payments, mobile wallets had been considered a necessary platform for mobile commerce as they provided much of the needed infrastructure for this form of commerce to work. Many of these applications are based on NFC technology, which allows for digital information to be transmitted over short distances. The problem, however, is that NFC technology is not universally supported throughout the mobile space. Indeed, the technology has been losing support from many of the companies and organizations that have emerged as strong players in the field of mobile payments, such as PayPal.
Consumers, as well as device makers, are favoring options free from NFC
Mobile wallets are beginning to give way to other applications that take a more accommodating approach to mobile payments. These applications seek to enable a wider range of consumers to participate in mobile commerce, which had, in the past, been largely restricted to those with NFC-enabled devices. These devices are still rare despite the efforts of companies invested in mobile commerce to see their expansion. A growing number of device manufacturers are beginning to abandon NFC technology, favoring mobile commerce platforms that offer some alternative.
Wallets may still be valid in mobile payments if an alternative to NFC is found
As device makers, like Apple, begin to move away from NFC technology, mobile wallets may be due for some change. These applications still receive significant support from Google and Isis, but the NFC-capabilities of these platforms make them unaccommodating to the growing interests of consumers. If organizations focused on mobile commerce want to retain the foothold they have established in this still emerging sector, they may soon have to consider finding an alternative to NFC technology.
