With only a few weeks to go until the Olympics, payment
innovators and technology providers are heating up the debate on
the future of NFC.
Go deeper with GlobalData
Barclaycard’s head of digital payments, Tom
Gregory, says the number of Barclaycard PayTag NFC sticker in issue
is increasing steadily and that the company is optimistic about
customer adoption of the technology.
Barclaycard predicts that the volume of point of sales (POS)
compatible with NFC technology in the United Kingdom will soar by
50% in 2012.
“The take up of the PayTag has been phenomenally successful. I am
unable to disclose the exact number yet, but we are pretty please
with the results,” he says, adding that the acceptance
infrastructure is improving at an impressive rate. “There are
100,000 [NFC enabled] payment terminals in the UK today. And this
number will reach 150,000 till the end of the year,” said the
Barclaycard executive.
Asked whether Barclaycard plans to invest in
mobile payment alternatives to NFC, Gregory says the company “will
continue monitoring” other technologies and develop strategies as
necessary.
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By GlobalDataGregory says the spread of the NFC technology
in the UK will be boosted by adoption of major players like
Transport for London (TfL), arguing that large initiatives will
encourage usage, and improve awareness of the technology.
Growing awareness
“We are achieving a balance of adoption
with awareness. This is moving in the right direction. NFC is the
future. We are investing in it because we have confidence in the
technology,” he said.
Despite the up-beat view from Barclaycard,
research from Gartner argues that while global mobile payment
volumes are expected to increase by 62% in 2012, the volume of NFC
transactions will remain rather low until 2015, with substantial
growth beginning only in 2016.
Reacting to Gartner’s finding, Gregory says:
“There are so many predictions being made, some pretty different,
but the level is beginning to rise and we are pretty happy.”
The finance and technology industries’
confidence in the NFC payments was corroborated in late May, when
executives from MasterCard, Sony and Intel, among others, stood up
for the technology during the Smart Card Alliance’s NFC Solutions
Summit 2012.
The group said NFC will improve the shopper
experience at the POS and in on a daily basis interactions.
NFC is “well along the way to mass market
adoption,” said James Anderson, MasterCard’s senior vice president
of Mobile and Emerging Payments.
Some doubts
Yet, there are some who support the Garner
findings.
According to Shashi Verma, director of
customer experience for TfL, the speed at which NFC payments work
are not fast enough. He argues that public transport networks in
London need faster processing times, up to 500 milliseconds instead
of the current 300 milliseconds, to really benefit from the NFC
potential.
Verma highlights that the migration from phone
hardware-based NFC technology to SIM-cards has led to a decline in
payment speed time.
Security
At a recent webinar, Barclaycard’s Gregory tackled ongoing concerns
about the security of NFC and said the technology is safe.
He did not reveal the number of fraudulent
attacks made on Barclaycard NFC products, but said the company
registered a “very small volume of fraud transactions related to
the PayTag.”
Fraud generally occurs in small transactions
and are linked to merchants’ inappropriate identification of the
purchaser.
The Barclaycard executive reiterated that the
customers will be reimbursed of any undue purchase, and those
merchants who decide not to do full verification of customer data
might be held liable.
Availability
Despite the slow increase in the number of NFC fitted mobile
devices, Barclaycard is still optimistic about the technology.
According to Gregory, the PayTag
contactless sticker provides a bridge to the technology until NFC
fitted devices are more commonly available.
“We do not know when every android
mobile or iPhone will have NFC. So until that happens we will use
the tags.”
