Square Rounds on NFC with Starbucks Deal

NFC is a fabulous technology. It will enable all manner of efficiencies in travel and shopping, it will enable all manner of innovations in advertising and marketing – but it is not going to be the cornerstone of mobile payments.

Whilst we have been saying this for a while, and our readers have  confirmed our theory, the news that Starbucks has signed a deal with Square is another nail in the coffin of hopes for NFC and mobile payments. We have long said that other, cheaper, easier, more intuitive solutions will swamp the lumbering progress of ISIS and other NFC payments initiatives and this deal means we are right.

I hope that it does not mean that NFC itself will suffer.

What the deal does mean, as Drew Sievers of mFoundry says in his short, concise analysis of the deal, is that, in payments, “the great game is afoot.”

Square is certainly a front runner and major player in the game, but there are others. PayPal is busy transforming the shopping experience – not just the online one – whilst heading for $10 billion in mobile transactions this year. Meanwhile payments giants Visa and Mastercard have done deals with telecoms operators (BV: Pick me, Pick me  – the Payments teams are being chosen) to provide wallets for millions of their customers. Some, but by no means all, will involve NFC.

Meanwhile mobile payments outside the cities of North America are under threat as AT&T and others now plan to switch off their 2G networks because of spectrum restrictions. This means that many, many smaller retailers who were – probably without knowing it – going to be using NFC and M2M over 2G networks to conduct their mobile transaction business now cannot do that. At least not without going through a major upgrade process.

 

Remember – Never Forget Cash.

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Alex Leslie
About Alex Leslie 400 Articles
Alex was Founder and CEO of the Global Billing Association (GBA), a trade body focused on the communications sector. He is a sought after speaker and chairman at leading industry conferences, and is widely published in communications magazines around the world. Until it closed, he was Contributing Editor, OSS/BSS for Connected Planet.

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