Mobile payment and mobile commerce applications are proliferating in the U.S., but the adoption of Near Field Communications (NFC) technology that allows mobile phone customers to quickly tap a mobile phone and pay for a subway ride or a grocery store purchase is years away, several industry officials said at a conference here.
At this week's Go Mobile 2009 conference, more than a dozen companies showed off technologies that help users pay bills or purchase items over the Internet from a smartphone or other wireless device, similar to the way millions already use a computer to make purchases.
But no vendors were selling or promoting NFC equipment, even though Vivotech Inc. in Santa Clara, Calif. recently said it has sold 400,000 card-reading devices to retailers in the U.S. Those check-out devices read credit cards containing a chip that communicates over the wireless NFC standard; the chips could eventually end up in phones.
So far, just three mobile phones sold around the world have NFC chips, and most chip reading terminals seem to be in Japan, conference panelists noted. In fact, millions of Japanese commuters use the NFC technology in wallet phones to board subway trains.
In other countries, however, it will take years for subway systems to convert to NFC, and even longer for a wide range of retailers to follow suit, panelists saod. In the U.S., subway systems are run by each city and the recession means subway administrators will likely hold onto payment terminals as long as possible, said Cameron Franks, direct of global accounts for Sybase 365 Mobile Services, a Sybase division.
"NFC is most likely to happen first in countries where mass transit is centrally operated," Franks said.
Instead of NFC, Sybase is focusing on person-to-person mobile payments and remote payments technology using a team of 400 mobile commerce workers to build applications. In one example, Franks mentioned that Sybase worked with RBC Mobex in Canada, where Web-to-mobile and mobile-to-mobile payments are supported by using SMS texting.
In that system, which is sometimes used by Verisign Inc. and other competitors, a mobile user doesn't have to set up a relationship with someone else. Instead, funds are transferred from a credit card or a PayPal account.
Several other mobile-commerce executives generally shared Franks' view.
Tim Sherwin, chief marketing officer at Cardinal Commerce, said he is excited about upcoming mobile commerce capabilities, including upgrades in iPhone 3.0 software next month that could improve mobile commerce from the App Store About 50 companies already work with Cardinal Commerce to provide mobile applications that can help retailers gain customers and users save on purchases.
In one example, Foot Locker has posted signs in its retails stores urging mobile phone users to send a text message via mobile device to get a loyalty code, Sherwin said.
The loyalty code comes back to the user, who shows it to a clerk at the shoe retailer to get a discount. In one measure of the application's success, he said Foot Locker has found that about 80% of the Foot Locker loyalty users are new customers.
Another mobile commerce capability was demonstrated by Didmo, which is based in Stockholm, Sweden. Didmo provides business tools that allow it to port Web text and photos to any mobile device, tools it said a designer can learn in 10 minutes.
In one example, Ski Sundown, a resort, was able to customize a questionaire to send to guests via mobile devices for quick insights on their stay. And Pure Green, a vodka maker in Sweden, has used the Didmo tools to send advertising photos to mobile phone users coupled with promotions.
Didmo charges 25 cents for each message, said Robert Chaves, CEO of the startup. "That's a small portion of the cost of a venture."