Credit cards are passe. Magnetic strips are prone to de-magnetization, get messed up and destroyed with age, and can cause general frustration in the checkout line at your local supermarket–especially when the cashier has to swipe it a dozen times before it registers. Did I just pay for my groceries multiple times? you ask yourself on the way out. Hopefully not…
The concept of credit is a great one, and it makes life a great deal easier. I, for one, hate carrying cash and much rather using my card as much as possible. But at the same time, I hate carrying multiple cards, pulling them out of my wallet, losing them, and so on. I’m much more conscientious in keeping track of my mobile phone, so what better device to use when I need to pay for stuff? It has security to prevent unauthorized users from gaining access and I can even remotely wipe it if I do lose it. That would be nice since I wouldn’t have to call one or more banks and have them change my account numbers, re-issue new cards, and so on.
Well, turns out the technology and implementation of such a device and system is already here, and it’s called Near Field Communication. It’s similar to RFID in the sense that it’s used to wirelessly transmit information over a pretty short distance, but instead of using a hardcoded tag like RFID, a device employing NFC can transmit any data it wants to a compatible reader. So essentially, your phone could act as 5 different credit cards at once if you so chose. All you’d need to do is pick the one you want to use from the phone’s software, move the phone near the reader, and the transaction would commence. Pretty slick, huh?
That all sounds great, of course, but for this to really work, it has to be standardized in much the same manner as the current credit card system. Any credit card can be used on any credit card reader. They’re all compatible with each other. The only issue that arises is whether a merchant has a contract with your card issuer. For instance, some retailers don’t process American Express cards, but other than issues like that, the credit card system is ubiquitous.
Google has been a big mover in this arena in the past 12 months and beginning later this year, NFC equipped Android phones will be able to take advantage of a new service named “Google Wallet.” They’ve partnered with banks like Citibank and MasterCard, in addition to retailers such as American Eagle and Macy’s. As more and more phones are enabled with this service and new retailers come on board, this serves to be a great boon to consumers! I, for one, can’t wait!
There’s one potentially looming problem though.
Apple is reportedly working on a similar NFC system for the next slew of iOS devices. Nobody’s sure how far along this thing may be, or if we might even see it in the iPhone 5, but it’s still a bit worrisome. If Apple couldn’t even be persuaded to make their Facetime protocol compatible with existing video chat services (many of which have been established for quite some time), can anyone really expect them to play nice in an arena where money might be made directly off of consumer purchases? Something tells me the answer is a resounding “no!”
Certainly competition is good in driving down prices, but this argument is not about that. It’s about making things incredibly easy for consumers to use, not to mention compatible across brands, service corporations, and country borders. If Apple is indeed working to bring this technology to future devices, my hope is that they’ll partner with Google in order to tie into existing infrastructure. Failing to do so will only serve to hurt both consumers and retailers as they’re faced with the difficulty of supporting both systems or the choice of supporting only one.
Ultimately, things will become standardized and either one side will win or compromises will be made between competitors; however, Apple’s choice in this area could determine whether the technology becomes ubiquitous within 12 months or takes many years to saturate the marketplace.
Make the right choice, Apple.