Microsoft follows Google and Apple into payments

Throwing its weight behind NFC

Microsoft is throwing its weight behind NFC technology as it follows Apple and Google into mobile payments with the next edition of its Windows Phone operating system.

Windows Phone 8 will support integration with NFC chips, which exchange data over short distances and let users make payments using their mobile devices. Microsoft is also launching a Wallet app, which apes similar offerings from Google and Apple, where users can store credit cards, coupons and loyalty cards to redeem offers and make payments. Unlike Google Wallet and Apple Passbook, Microsoft’s offering will have NFC integration, creating an end-to-end mobile payment service on devices running Windows Phone 8 that is completely controlled by the firm.

While this is a boost for NFC adoption, its effects are limited. Questions still remain over where and when consumers will be able to use the service, with Microsoft failing to mention which, if any, carriers it has partnered with on NFC. Not only this, but the number of phones running Windows Phone remains small compared to iOS and Android. Nevertheless, Microsoft is laying the groundwork for NFC payments. The iPhone does not currently support NFC, but Apple is widely expected to follow suit with the next iteration of its device now that more major players are throwing their hats into the ring. 

Despite the hype, NFC remains a relatively nascent technology and is not expected to hit the mainstream until 2016. This has as much to do with consumer wariness as the fact that the infrastructure has simply not existed until now, with only around 100 smartphone models currently boasting NFC chips worldwide and retailers only slowly adopting NFC payment terminals in-store. NFC also faces competition from services such as Square and PayPal Here, which allow users to make and take payments using plug-in card readers and are already turning over billions of dollars annually.

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