As we’ve reported on the growth of Near Field Communications for transactions, one major obstacle has been merchant adoption of NFC-enabled point-of-sale terminals. Well, Verifone is reportedly looking to shelve that concern, telling NFC World that it will include the technology in all its new payment terminals.
This was probably inevitable as NFC matured but still a good piece of news for proponents hoping to accelerate the adoption of the technology. Right now, retailers and merchants are looking at paying something like $200 for a new terminal that supports NFC. But with little demand from consumers, there’s not much incentive to spend the money. But by making the technology standard in new terminals going forward, it will make it much easier for merchants to start accepting NFC payments.
This is still just one piece of the puzzle, but it’s a significant one. Verifone is a major seller of point-of-sale terminals and has only gotten bigger with its $485 million acquisition of Hypercom last fall. Merchants will still need to upgrade to new machines, which could take years depending on their upgrade cycle. But the question of whether to adopt NFC will become less important if it’s included in their next purchase.
The move by Verifone jibes with recent comments from Verifone CEO Douglas G Bergeron, who advised mobile commerce start-ups to work closely with retailers and merchants.
The retail point of sale represents a point of convergence for smartphone-initiated payments, social networking and electronic couponing, but it won’t happen if retailers are expected, on faith, to absorb the costs of making it work. This isn’t just an issue of adding an NFC reader, it requires deep software richness at the point-of-sale to interact with the smartphone and manage a services-based model encompassing new applications and deployments without disrupting operation of existing card systems.
Bergeron added that mobile commerce needs to be streamlined with point-of-sale terminals and needs to be managed well for retailers. And it needs to work well with other payment options, which aren’t going away soon. By making NFC standard in new terminals, Verifone is on its way to addressing those issues.
NFC continues to gather steam, especially coming out of Mobile World Congress, where it was a major theme at the show. Research in Motion said many, if not most, of its upcoming phones would support NFC while Deutsche Telekom said it will launch a mobile wallet NFC service in Europe this year, with expansion to the U.S. next year. Google CEO Eric Schmidt presented at the show and continued to evangelize the merits of NFC, which is installed in the Nexus S by way of a small radio chip and is expanding to more Android devices.
It’s still a ways off before NFC-enabled phones replace credit cards, which are perfectly adequate for most people today. But the pieces continue to fall into place for NFC, with Verifone doing its part for the cause.
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