Credit and debit cards might become passé with tech giant Microsoft readying to roll out its new Windows Phone 8 operating system complete with near field communications (NFC) capability. NFC is a short range RFID technology that enables consumers to use their mobile as a wallet to make payments.
NFC-enabled phones can be tapped to an NFC-enabled payment terminal to pay for, say, a coffee or a newspaper - much like the way you would swipe a credit or debit card. The user can transfer cash to his mobile account from his bank account as and when required. This technology can also be used to transfer data between mobile devices and make bluetooth pairing of devices hassle-free.
NFC is an excellent example of how mobility and consumerization of technology are redefining the way the world lives and works. Microsoft putting its heft behind this technology will pile pressure on phone makers to bring more NFC phones into the market.
Technology research firm IDC estimates that 2.2% of the smartphones shipped worldwide in the first quarter this year ran on Windows Phone, compared to 23% for Apple and 59% for Android. But many carriers are betting on Windows to break out of the stranglehold of Apple and Google. Also, the software is an attempt by Microsoft to couple smartphones with PCs and tablets running on its Windows 8 OS, a move that will further spur the BYOD culture.
More NFC phones coming into the market can ramp up the number of mobile wallet transactions. It has the potential to boost commerce even in places where banking is not common. For merchants, NFC holds another attraction - they can save on the charges that banks levy on debit and credit card transactions.
The good news is that NFC transactions are considered safe, may be safer than online banking, with the additional layer of password protection offered.