EXPERT COMMENT: iZettle CEO asks whether NFC will be king of mobile payments

Open minded about NFC

Jacob de Geer is the founding CEO of a social payments company iZettle. Prior to iZettle, Jacob was one of the founding members of Tre Kronor Media, an award-winning agency (Media Agency of the year in 2009 and 2010) for performance based marketing, integrated media and advertising, online and offline. Jacob was also the managing director of TradeDoubler where he was responsible for Nordic operations.

Near Field Communications (NFC) has been the golden child of mobile payments for the past couple of years. But more recently, other companies have been dominating the headlines such as Square, founded by Jack Dorsey (co-founder of Twitter) and iZettle, Europe’s equivalent to Square.

At first glance, it is difficult to understand if NFC and the likes of Square compete or complement each other. Will the technology negate the need for mobile payments schemes that allow individuals to accept credit or debit card payments through their mobile phones?

It appears that Keith Rabois, COO at Square,opts for a firm no. He has been quoted as saying: “NFC has no value” and it stands for “Not For Commerce”. This leads us to believe Rabois sees longevity in processing card payments via a mobile device and doesn’t believe NFC will become a reality in the immediate future.

For iZettle, supporting NFC is not as daunting. In the future, it could enhance our service. But, in many ways, whether mobile payment companies integrate NFC won’t be down to the company; it will be decided by consumer and retail adoption.

If consumers trust in NFC and take to the technology then it will become more important for companies to tap into NFC hardware that’s already in some mobile phone devices such as Samsung Galaxy Nexus – it is also rumoured to be in the ‘iPhone 5′. Another point in favour of integrating NFC is that it is more cost effective to populate an existing NFC market, rather than trying to repopulate the existing point of sale devices.

Many coffee chains and fast food retailers are not waiting for mainstream NFC consumer adoption. Some are already trialling faster mobile payment options and better loyalty systems. Starbucks introduced a mobile payment application last year that allows customers to load money onto the digital Starbucks Card app on a smartphone and pay for a coffee by presenting a 2D barcode to pay-by-scan at the register. Starbucks took 26m mobile payments last year in over 9,000 locations in the UK.

Whilst there has been a lot of hype around NFC, there is still a long way to go before it becomes ubiquitous and poses a serious threat to existing services. It’s important to remember that mobile payments of this type are in their infancy, and whilst consolidation and integration in a market with such innovative and disrupting technologies is inevitable, it is still a long way off.

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