What’s next in NFC payments?

Near-field communication (NFC) has been a seismic technology for the payments industry. Without it, contactless card transactions and mobile wallets like Apple Pay wouldn’t be possible.

So if we want to know what’s next for payments, we can get a pretty good idea by looking at some of the latest developments and potential future innovations in NFC.

Android Wear payments?

NFC payments could soon make much bigger strides into the wearable technology market, with reports suggesting that Google is planning to incorporate NFC support into Android Wear, its operating system for devices like the Motorola Moto 360 and Samsung Gear Live smartwatches.

Android Police published a report suggesting that there has been some progress on this front. Speculative analysis of Android’s code unearthed clues hinting at NFC payment capability in wearables, including user interface messages such as: “Try holding your watch to the terminal again.”

Customers have been waiting for contactless payments to extend from Android phones to wearables for over two years, according to Android Police.

Amex Pay arrives in Canada

More good news for Android users: American Express has launched its Amex Pay mobile contactless payment service in Canada. Available exclusively through the Amex App, the solution allows users of NFC-enabled Android devices running on Kitkat 4.4 or higher to complete transactions wherever American Express contactless payments are accepted.

Suat Alaybeyoglu, vice-president of consumer acquisition and management at American Express Canada, said: “The launch of Amex Pay is another example of our commitment to innovation and providing our card members with more ways to use their cards. Card members can shop with ease using their mobile devices, while continuing to experience the service they’ve come to expect from American Express.”

Will Australian banks strike a deal with Apple?

Australia’s biggest banks are still involved in a dispute with Apple regarding access to the tech giant’s mobile payment system. The Australian Competition and Consumer Commission recently indicated that it wouldn’t let four major banks act as a cartel in negotiations with Apple.

Since then, the Commonwealth Bank of Australia has tried a new approach – offering to pay for access to Apple’s payments infrastructure, as long as Apple allows the CommBank app to access the iPhone’s NFC controller for contactless payments, bypassing Apple Pay.

Matt Comyn, head of CBA’s retail bank, told the Australian Financial Review: “If we could get access to the NFC antenna and our wallet had the same experience [as Apple Pay] on parity, there is no way the interchange fee, as currently contemplated, would be the stumbling block.”

Will we see a resolution in 2017?  While ANZ has enabled ApplePay for its customers and claims it is helping to sell products, CBA has indicated only a small proportion of its customers use their iPhones for tap-and-go payments.

Further growth in Asia

Developments towards the end of 2016 illustrated the increasing penetration of NFC payments in Asian markets, a trend we can expect to gather pace in 2017.

Japan has officially welcomed Android Pay, which is launching in partnership with the Rakuten Edy prepaid contactless smart card. That means it will be available at over 470,000 locations in Japan that accept Rakuten Edy eMoney, including chains like Family Mart, McDonald’s and Lawson.

In China, meanwhile, consumers now have the option to complete mobile payments at some 2,500 Starbucks outlets, thanks to a partnership between the coffeehouse chain and Tencent’s WeChat Pay NFC payments platform.

We can expect many more of these kinds of developments in 2017 and the years to come. Each one will contribute to the accelerating growth and acceptance of NFC, adding to its status as an indispensable technology for the global payments industry.

Written by Andy Brown

Andy Brown

Andy is marketing director for payments at NCR. He has nearly 30 years' experience in e-payment systems from the delivery and support of systems in the Far East and Europe, from both the product management and marketing perspectives. Based in the UK, Andy is responsible for marketing NCR payment solutions.

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