Low Consumer Interest May Delay NFC Technology For iPhone 5

Google Wallet and other NFC payment platforms such as Visa and Isis have put digital wallet technology on the map. But a lack of consumer knowledge and interest in paying for goods with their smartphone may mean no NFC on the 2012 iPhone 5.

For the first half of 2011, rumors that NFC “swipe and pay” payment technology for the iPhone 5 were at their highest levels. With the advent of Google Wallet, it was assumed that Apple would answer in turn with its own proprietary digital wallet. Given the fact that Apple’s aim is to integrate the use of the iPhone into as many facets of daily life as possible, NFC would be an obvious feature for a future iPhone model.

Yet, by the end of the WWDC, the unveiling of iOS 5 and iCloud seemed to have pushed away the strong call from iPhone users for NFC. Now that the iPhone 4S has been released — sans NFC — where does digital wallet stand for the iPhone 5 in 2012?

According to several studies, it is still unlikely.

A revealing article on ZDNET indicates that, while avid smartphone enthusiasts are well aware of NFC, average smartphone users are either wary or unaware of the digital wallet concept. Because of this, the commerce sector has already been let down by a low return on investment for NFC: “Laura Chambers, senior director of PayPal Mobile, warned during a panel discussion at GigaOM’s Mobilize 2011 conference last week that merchants have already been burned by the experience of paying for terminals to support NFC chips on credit cards, and only a miniscule portion of the population is actually using them nationwide.”

It has to be assumed that Cupertino has kept an eye on these developments and, as a result, may see NFC adoption as a minefield. Google Wallet offers the most obvious failure: to date, only the Nexus S works with it, and many of the reviews for the technology have been spotty at best.

At the heart of an NFC rollout for the iPhone 5, Apple would need to do more than simply onboard the necessary hardware and software — they would also have to sell merchants on the technology as well. Because of this, including NFC on the iPhone 5 is infinitely more complex than adding Siri to the iPhone 4S. With the latter, it didn’t require pitching the idea to merchants as well.

To be sure, NFC is right up Apple’s alley from a conceptual standpoint: the idea of interfacing one’s finances and spending into the Apple ecosystem would only make Steve Jobs’ vision for a mobile digital lifestyle more complete. But we’ve seen in the past how Apple will delay the adoption of new technologies until they are 100% certain that they will function properly — and turn them a profit.

By Michael Nace



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