Mobile payment adoption lies in attachable readers
August 13, 2013

While many smartphone and tablet developers are incorporating near-field communication technology into new devices, it may be years before NFC mobile payment adoption takes off. In an interview with Mobile World Live, Philip Yen, group head of emerging payments for MasterCard, said that the movement toward NFC technology may backtrack the payment option, as attachable readers are more applicable in today's retail environment. A plastic payment reader that can attach to a portable gadget is more affordable for small and medium-sized businesses than NFC and allows retailers to accept mobile credit card payments quickly, securely and easily.

NFC adoption may take too long
According to Yen, NFC and attachable readers are similar to chip-and-pin and magnetic-strip cards. Yen said chip-and-pin cards have taken a long time for countries to embrace, and the same goes for NFC technology. However, the ease of magnetic-strip plastic allows it to be accepted quickly in certain countries, similarly to attachable credit card readers.

Yet NFC World reported the recent "Mobile Development Survey" by market research firm Evans Data Corporation found many portable device developers are starting to include NFC technology in their gadgets. Conducted in May, the survey asked more than 500 mobile developers about the challenges they face and their plans for the future. More than 31 percent said they already support and utilize NFC technology, with 45 percent reporting they expect to do the same within the next year.

Many of the improvements the developers said they were making are in voice recognition and device pairing. According to Yen, such innovations are not applicable to current retail technology and consumer needs. He said implementing these advanced features takes time and money.

"In almost all of the countries that went down [the chip-and-pin] path, it took about 10 years from planning to ubiquitous usage," Yen said. "Merchants need to upgrade their systems [for NFC], and banks and telecoms need to work out their business models. All these factors take time."

Attachable readers continue to be a reliable way to accept mobile plastic payments. While consumer adoption of NFC technology may increase within the next few years, credit card hardware that is external to portable devices is easier to implement and more affordable for customers and SMBs.

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