While scanning the horizons for favorite technologies to watch in 2012, I’ve been keeping an eye out for any news surrounding near-field communication (NFC) technology at CES this week. And especially for any announcement with the potential to catapult adoption of the technology to the next level.
As long-time Wall Street Daily readers know, NFC technology – which can turn your smartphone into a mobile wallet – has been slow to catch on in the United States, because not that many devices even have the technology built-in.
And without any mega-popular smartphones (i.e., the iPhone) endorsing the technology, it just hasn’t been on consumers’ radars.
A new technology announced at the Consumer Electronics Show (CES) this week, however, should get the ball rolling a little faster – with or without an NFC-enabled iPhone.
A Solid NFC Alternative
Mobile payment companies, DeviceFidelity and SpringCard, have teamed up to deliver an NFC solution – called moneto – that should get more consumers familiar with NFC’s capabilities.
All you need is a smartphone that has a microSD card slot – which many people already have and use to increase the storage capacity of their devices.
You just purchase and insert a special $30 microSD card that has the ability to communicate with NFC systems, attach a sticker to the battery that improves the NFC signal and – presto! – you’ve made your phone NFC capable.
MasterCard (NYSE: MA) supports NFC technology, as well, so you’d be able to use a prepaid card within your phone to make purchases at retailers with the MasterCard PayPass terminals.
For those of you with an iPhone – which doesn’t have a microSD slot – you can still use moneto’s service. But it requires a separate $80 case. Still, if you’re as excited as I am about the prospects of a wallet-less future, it might be worth it.
But now that non-NFC phones are gaining near-field communication abilities, does this mean NFC chips are out?
Don’t bet on it.
NFC’s Here to Stay
For one, although more phones have microSD slots than NFC chips, it’s still not a universal feature. As I mentioned above, the iPhone doesn’t have it. And some newer Android phones – like the Galaxy Nexus – are shipping without the slot, too.
Most importantly, NFC chips provide unmatched security.
While information stored on microSD cards is encrypted – and you can set up a PIN code in moneto for an extra layer of protection – NFC chips take security to the extreme.
Protected by multiple PIN codes and armored with ATM-level encryption, they’re tamper and laser resistant. Like I’ve stated before, if a thief tries to make a purchase using your smartphone, they’d be better off using a slab of cardboard at the checkout counter.
With that said, moneto certainly offers a useful alternative to NFC for users who want the benefits of mobile payment technology right away. And at the very least, it should trigger greater consumer interest in the technology, which would eventually get more phone makers on board.
Like DeviceFidelity President and CEO, Deepak Jain, says, “As this breakthrough mobile wallet launches in the United States, it not only makes mobile payments available to iPhone users for the first time but it also opens the door for consumers to adopt NFC while pushing mobile commerce forward.”