Broadcom, the radio chipmaker is making a big bet on mobile payments finally hitting its stride with its latest Near Field Communications chip. Broadcom’s new silicon will be manufactured at 40 nanometers, which means it will be small, more energy efficient and that Broadcom will make a lot of them, so the market had better be there. Luckily, Craig Ochikubo, VP of the business unit that oversees NFC at Broadcom believes it’s finally time for mobile payments to shine.
“We can’t ignore mobile payments. So much has happened recently and carriers and banks and credit card companies all see that there’s a revenue stream involved, and so they’re working together,” said Ochikubo.
But beyond mobile payments Ochikubo is excited about NFC for making connectivity easier. For example, NFC can be used to authenticate a device more easily than a Bluetooth pairing, so if someone wanted to share a video file from his phone to his television set, all he would have to do is swipe the phone against an NFC reader and ship the file over using a Wi-Fi or other large data rate protocol. Making it easier to connect the phone to other networks securely and easily could enable a host of new applications he thinks.
“We are looking for the Angry Birds, application for connectivity, ” Ochikubo said. “NFC could help. Someone could build something new that helps use connectivity in new ways.”
For years, I’ve sat through presentations about NFC for payments, for talking toys, for sharing personal information such as business cards and many other use cases, some of which are silly and some of which could be awesome. In Ochikubo’s mind those days will come after mobile payment efforts have forced device manufactures to put NFC chips inside smartphones. He notes that carriers are asking vendors to do so, because they see an opportunity to make money as part of a revenue sharing agreement with credit card companies or banks.
Of course, mobile payments have been the next big thing since 2005, or even earlier, but thanks to the widespread adoption and comfort people have with smartphones, Ochikubo believes the time for mobile payments is now. He also believes that one of the bigger holdouts to adoption of mobile technologies — namely getting merchants to upgrade their readers and install new equipment to process payments from a cell phone — might be close to capitulating.
Many of the large credit card companies view mobile payments as a way to help cut down on fraud, and so are actively trying to persuade merchants to swap out their old equipment with new gear that will also read NFC chips. Visa for example has pushed a plan that will lower the costs of complying with security certifications if merchants switch.
Perhaps given that handset makers already have lofty NFC plans, it stands to reason that Broadcom’s bet on 40 nanometer-NFC chips will pay out. Ochikubo says by the first half of 2012 devices containing this new chip will be on the market. From there it’s a matter of getting consumers comfortable with swiping their phone rather than their credit card.