With the resurfacing of NFC based solutions driven by mobile
providers and banks in various territories (and as if this weird late adoption
isn’t a good enough indication to its irrelevance), I feel compelled to repeat
my message about connectivity technology.
NFC was dead on arrival for payments, and the ongoing
discussion about it is misleading and irrelevant. That’s for two reasons –
first and foremost NFC doesn’t solve a problem, something I’ve been repeating
for a while but has been discussed again lately. Handing your card over,
waving your phone, who cares? There’s no consumer incentive to adopt this
technology. On the other hand there’s (lack of) merchant adoption: NFC usually requires
replacing or adapting your POS terminal, and the merchant has no value in doing
so. A card network that really believes in NFC can push it by promising lower
fees or other types of coverage to give merchants an incentive – that was tried
and failed with 3D secure. Merchants hate conversion killing or just
non-contributing features.
The same is relevant to other connectivity technology. I
hear Jumio
is growing, but most of its volume isn’t coming from its card.io based
technology, that allows you to show your card to the camera to have it recognized.
The reason? In the time it takes you to set up flash, take your card out, position
it in front of the camera and add needed info you can type it in since you
remember it by heart. Of course you do. So as I said here, there is not incremental benefit
to anyone other than some marginal fraud prevention for merchants (which is not
to be discounted, but is marginal, since it’s a conversion killer).
Disagree? Consider other solutions that area vying for
market share: Google Wallet, Serve, and other sign-up-and-add-your-credit-card
solutions that popped up lately. Consumers don’t have a problem with directly
using card to pay for purchases – not offline, and increasingly not online (at
least in the US). They don’t care how secure your solution is, they have
plastic. They don’t care about coupons; they have rewards on their cards. They
are not interested in a new financial relationship that’s based on their credit
card. If you’re not solving a problem, you’re going to have to buy yourself
some market share, which is exactly what’s happening, even with the larger
providers.
