Despite Uncertainties, CUs Should Keep Tabs on NFC

Doubt has been swirling around the potential widespread use of near field communication, or NFC, a technology that links consumers’ mobile phones to merchants’ point-of-sale terminals, enabling instant mobile payments. Apple released the iPhone 5 without an NFC chip, leaving millions of consumers out of the NFC equation. Google locked itself into NFC with the launch of the Google Wallet app, but other possible major players in the NFC arena, including PayPal, Bank of America and Walmart, sidestepped the technology during their recent mobile payment initiatives.

Isis, a mobile commerce venture spearheaded by AT&T, T-Mobile and Verizon, allows consumers to pay participating merchants using NFC-enabled mobile devices and eligible payment cards, and launched a trial of their service in Austin, Texas, and Salt Lake City last October. No official results have been released. Some reports indicate Isis transaction activity has been limited so far, while a spokesperson for Isis said it is pleased with the results of the launch and will continue to incorporate market learning as it grows. Currently, only 3% to 4% of all smartphones have NFC chips, and just 140,000 out of 7 million merchants have NFC readers, according to a CO-OP Financial Services white paper.