8 November 2006 186 views No Comment Print This Post  Email This Post

ABI Research’s analyst, Beth Schechner explains that due to the limited functions of cards, it is possible to see a migration from card to mobile phones equipped with NFC.
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It is quite interesting that our research is pointing to the same direction. One hypothesis of potential disruption we study is a sliding from card-based to phone-based payment systems. Our latest data show that industry experts evaluate NFC as a very good technology alternative for payment systems. We are currently working on a paper exposing these last results. I will post it on the blog once it is ready.

Is this a real sign of a technology disruption or again just a hype relayed by analysts and industry experts?

Looking at the NTT DoCoMo experience in Japan, the technology and business case issues have been solved by combining suitable technologies and good business partners. NFC itself is not sufficient to create the perfect solution. There is a real need to involve the right companies (e.g. transit companies and large retailers) to ensure numerous point of acceptance and a good customer base. The volume of transaction is also key. Therefore, these payment systems should be first deployed in “transaction-intensive” industries. Once the consumers get used to mobile payments for daily financial transactions, the real migration from cards to mobile phones could start. Might take some time though …