Near field communications vs. the web

Is the near field communications movement set to really take off anytime soon? There have been many piecemeal steps toward such services, a lot of pilot programs and intermediate moves, such as adhesive strips for mobile phones and cards. One recent report states that "during 2010, leading mobile network operators, banks, retailers, transport operators and others will be seeking to finalize their NFC business plans ready to launch commercial services in a number of countries from as early as January 2011."

This might seem a bit aggressive to some. Many are convinced that the biggest driver of NFC-like banking services remains the cell phone. Nokia is so far the only major phone vendor that has launched NFC-enabled handsets commercially. That's likely to change. But you have to wonder what applications will emerge. We've been talking about the standards--P2P payments and generic mobile banking.

But even as the NFC bulls voice more optimism, you have to wonder if mobile phone apps that do not depend on the NFC will emerge as something of a competitor. Will the mobile Internet in a sense leapfrog NFC applications? We're already seeing some interesting developments. PayPal X, which enables applications payments via PayPal applications for Web-enabled cell phones, is generating excitement, as it's the payment app behind Twitter's TwitPay. Amazon Payments and Google Checkout are also in the game. Creditcards.com notes: "Merchants who have been reluctant to foot the bill for smart terminals like the look of the mobile Web, which may enable them to reap the online harvest without the hardware investment. EBay estimates the value of goods sold via its eBay iPhone app topped $400 million this year alone."

So there are some interesting developments around the idea of contactless payments. This year may prove to be pivotal in deciding the ultimate technology winners. It looks like the phone will emerge as a payments and banking tool. But I doubt vendors will want to support the NFC if the transaction volume isn't going to be there. - Jim