Industry News

25/10/2011 - It seems that one of the major buzzwords floating around the payment processing industry is near field communication, or NFC. The wireless payment capability is emerging quickly as consumers look to utilize their smartphones and tablet computers for what they see as faster, more convenient transactions.

However, merchants shouldn't shift their entire financial operations to wireless payment technology just yet, as this system has yet to fully take flight in the U.S.

"Developed nearly 10 years ago, NFC has long had promise as a technology, but has yet to prove its value for enabling mobile payments or other purposes," Internet Retailer reports.

One road block standing in the way of NFC technology is the lack of mass adoption of the process. While NFC-enabled devices are becoming more common and point-of-sale terminals that allow for contactless payments are being seen at an increasing number of businesses, the capability is still too rare to invest in fully, say some industry experts.

Jason Kupferberg, an analyst at Jefferies, a global investment banking group, told the International Business Times that there are three major takeaways about the future of payment processing: "The industry now recognizes that simply replacing a card 'swipe' with a phone 'wave' is not a strong enough value proposition, the most likely way to drive consumer adoption of mobile is enhancement of the overall shopping/buying experience, mainstream adoption of mobile payments at the physical POS in the U.S. is likely three to five years away."

According to Internet Retailer, the only smartphone currently on the market with NFC capability is the Google Nexus S 4G, a Sprint Network device. While Sprint has sold approximately 500,000 of these phones, the number of consumers actually utilizing the Google Wallet feature is likely smaller.

For merchants, it is important to keep up-to-date on the newest technological advancements in the credit card processing industry, but it is also integral that they don't forget the needs of customers who hope to pay with traditional methods, such as credit card swiping and cash. While some consumers are interested in having the most cutting-edge devices, others like their old tried-and-true payment systems. Merchants must work to have the best possible payment processes in place for the moment while also keeping one eye on what the future may hold.