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January - 2011 - issue > Editor's Desk
Swipe or Wave? A Dilemma!
Christo Jacob
Thursday, December 30, 2010
Till now, we swiped our credit or debit cards to make a purchase. In the coming years, this concept may disrupt and we will see consumers waving their mobile phones for the same purchase. Mobile payment platform is busting with activities and Near Field Communication (NFC), a short range wireless technology is opening new avenues for service providers, banks and new players for commercialization of new technology. What is clear is that the market is still in flux as users are doubtful about how secure this might be.

But those developing this technology confidently vouch about the security since consumers will be able to instantly lock all the mobile wallet services on their phone if the device is lost or stolen and then have the services automatically transferred onto a new phone. They will also be able to use their phone to make payments even when the battery is flat. In Korea and Japan, the potential of these services have already been realized and is already available for commercial use. One in every 15 today there makes a purchase using NFC enabled phones.

Just how digitization of content earlier leveraged credit card and online payment usage, mobile phone penetration is sure to give a similar push to the rapid adoption of NFC enabled phones as a mode of payment in the coming years. Moreover, it is expected that the worldwide shipments of mobile phones with built-in NFC capability will rise to 220.1 million units in 2014, up by a factor of four from 52.6 million in 2010. In 2014, 13 percent of phones shipped will integrate NFC, up from just 4.1 percent in 2010. While Nokia has declared that all the new smart phones that will be introduced in 2011 will support NFC, Google has announced support for NFC in Android 2.3. However, a bigger push could come from Apple as it has been pouching the NFC experts and has already filed several NFC related patents since early last year. Apart from these bigwigs, there are a lot of startups experimenting on creating new modes of payment platform.

Santa Clara based PlaySpan is one such company. In an era where the global payment industry is morphing rapidly especially going digital with all the new devices, PlaySpan has made the much alluded micropayment services digital and versatile over a myriad of devices by leveraging on social network. Today, the four year old company has made much headway in this industry and is competing almost neck to neck with Golaiths like Google, Adobe, Yahoo and more, who are trying to grab a large chunk of the pie.

While this digitization of payment industry is a good news for the Goliaths of the industry, the scope of commercialization of new technologies like NFC will also give a platform for the Davids to be the new Goliaths of this emerging industry in the coming years.

Wish you all Happy New Year!

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