The COO of mobile payment startup Square, Keith Rabois, thinks that the mobile payment technology Near Field Communications (NFC) has no value proposition for consumers and merchants, he said at GigaOM’s Mobilize conference on Monday. “I’ve never met a single merchant in the U.S. who says I want this NFC thing,” said Rabois in an interview with GigaOM founder Om Malik.
NFC is a short-distance wireless technology that’s been under development for years, and could be a catalyst for mobile commerce. Some researchers are predicting that by 2014, one in five phones will be NFC-enabled. Companies that have invested in NFC include web firms like Google, blackberry maker RIM, carriers through their network called Isis, handset maker Nokia, chip make NXP, and many others.
But despite the growing ecosystem around NFC, Rabois questions how useful the tech will be to consumers and businesses, and said while NFC makes good PR and cocktail party chatter, it doesn’t offer a value proposition. Even Google’s work with Google Wallet is meant to help Google track behavior, and enhance their business, not to enable small businesses, said Rabois.
In contrast, said Rabois, we’re trying to help small business retain each customer, and have the same level of analytics as larger businesses but at a low cost. It’s hard for small businesses to compete at this level with the large companies, said Rabois. Square focuses its network on small business transactions, like a local merchant selling wares at a farmers market.
Small business owners can use the square plug-in hardware for their iPhones, and then an app that helps them securely make a payment digitally. But don’t expect Square to be a platform or API any time soon — Rabois said that because they are trying to make the transaction as simple as possible, it might not lend itself to an open API.
In addition to rejecting NFC, Rabois doesn’t seem too worried about competition from the bigger players. He called PayPal’s brand “atrophied,” and said that Square looks inward at its applications and services, not outward at competitors. The next new service to come from Square will roll out in October, and December, said Rabois.