John Cox of Network World reported today that two new studies from Forrester say mainstream adoption of NFC contactless payment is still "nearly a decade in the future, and rosy predictions to the contrary ignore the complex hardware and software infrastructures, standardization, business models, and consumer education that are needed."
This is not to say, Cox adds, that consumers won't enjoy the convenience of certain applications of mobile contactless services in the near future, like mobile transit passes, boarding passes for flights, hyper-local coupons or tourist info.
Traditional payment methods are still satisfactory.
Cox quotes Forrester analysts Thomas Husson and and Denee Carrington, who argue the whole mobile wallet/contactless payment concept may be more of "a solution in search of a problem," meaning that current cash/credit/debit payment methods aren't all that inconvenient in the first place.
Husson and Carrington's argument is something we've blogged about as well, especially when assessing the alleged convenience of mobile payment technologies shown in demo videos from PayPal and Square.
Where the real value is: Promotions and Loyalty
Payment transactions aside, Carrington writes, the "real promise" of mobile wallets is efficient connectivity to value-added services before, during, and after the payment is made:
- Offers and coupons (Google Offers, DealMap, Brands4Friends)
- Product information (Zagat, TheFind, ShopSavvy 5)
- Loyalty and rewards incentives (Foursquare, CardStar, Shopkick, and iOS Passbook)
Mobile Payment Players to Watch...
When talking about mobile payments, however, three rival areas have emerged, Cox writes:
- PayPal, MasterCard and Visa: PayPal is extending beyond online into in-store; MasterCard and Visa are incorporating new online payment technology to eventually expand them to work in-store.
- New entrants with new business models: Companies like LevelUp and Square (with its "Pay with Square" offering) provide value to merchants, with embedded loyalty programs and back-end analytics.
- Branded wallets: Starbucks' mobile app is an example that combines convenient mobile payments with a compelling loyalty benefits.
More merchants must also offer the terminals necessary to accept NFC payments.
Regardless of how quickly these technologies advance, there's still the question of when merchants will adopt NFC-enabled POS terminals on a widespread basis. Once again, we arrive at the chicken-and-egg problem.
Carrington predicts about 25% of U.S. consumers will have an NFC-equipped phone (taking into consideration that the upcoming iPhone 5 may have it), so it will be a while yet before stores everywhere make the hardware upgrade investment.