The Digital Wallet: NFC-equipped smartphones are coming your way

Wednesday, February 15, 2012

THESE days, we use our smartphones for just about any tasks that other devices could do for us. It's our pocket computer and Internet device, it's our digital camera and video recorder, it's our music and movie player, it's our alarm clock, it's our digital organiser, it's our calculator, the list goes on.

But if there's one thing non-electronic that the smartphones hope to emulate in the near future (and possibly one less item for us to carry around with) is our wallets.

Yes, that one thing that we can't leave the house without. The one that holds our identity card, ATM card, credit card, driver's licence and your cash.

So wallets will soon become part of your smartphone feature, and in a very big way, thanks to a wireless communication technology called NFC (Near-Field Communications).

The NFC chips in smartphones essentially transmit financial transaction data with taps, waves or swipes at store checkouts. Hence, NFC technology can turn smartphones into virtual wallets, giving us a cashless payment experience that links directly to our banking account or via rechargeable stored value cards (much like your EASI credit).

A single NFC chip on a smartphone would hold our financial account information, gift cards, store loyalty cards, and coupon subscriptions. We may also make online purchases directly from our phones. It is expected that the tap-and-pay mobile technology would eventually replace credit cards.

Analysts predict that NFC will become mainstream by 2013. A large number of new smartphones that will be rolled out this year will have NFC features. Google has embraced NFC with its Google Wallet app that's supported on the NFC-ready Nexus line of smartphones.

But it's not just about being a payment gateway. NFC technology can be utilised to process our identification details. I can see this being utilised in areas such as education or healthcare, where we no longer have to fill in forms manually, and instead waving our phone to a reader.

Of course, this feature would be useless without the infrastructure in place. In the US, NFC technology is rolling out slowly, but surveys have shown many Americans are still uninterested in the technology mainly due to security concerns.

This is why companies like Apple decided to wait until mobile payment systems are more widely adopted before they put an NFC chip in its iPhones. But it is likely that the next iPhone will be NFC-equipped, and when it does, rivals will also follow suit.

However, in South Korea, the infrastructure is ready, with over five million NFC phones used by Koreans to pay for public transportation and making purchases through advertising applications (digital posters).

Whether we like the idea or not, NFC will make its way into our lives sooner than we think.

But there is no need to worry about the need to adapt to this new awesome technology, just keep in mind that NFC will require far less of a learning curve than any other technology that preceded it.

The views expressed by the author are his own and do not reflect the views of The Brunei Times.

The Brunei Times

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