Take a good look at your credit cards, because before long, they’ll be gone.
As we’ve mentioned here before, the mobile payment industry is set to make credit cards obsolete.
The driving force behind this rapidly growing trend is a technology called Near-Field Communication (NFC). Simply put, it’s a “touch-free” form of payment, with semiconductor chips taking the place of credit cards. So instead of swiping a credit card, you simply wave your NFC-equipped device (for example, a smartphone) near the payment reader and the transaction is complete.
The NFC momentum gathered more pace this week, with tech blogs and news sites launching into hyper-drive. Here are five new developments that should hasten the rollout of this mega-growth trend…
NFC Kicks into High Gear
~ Amazon (Nasdaq: AMZN): The company is continuing to branch out from its role as online retailer and into the mobile payments realm. According to unofficial reports from Bloomberg, Amazon Payments, its online payment business, could soon take a stab at developing an NFC system.
One mobile payment expert even suggests that based on Amazon’s current payment platform, it could technically launch a mobile commerce application without an NFC chip at all. Needless to say, that would give Amazon a leg up over the rest of the NFC herd.
~ Sprint Takes Revenge on AT&T: Later this year, Sprint (NYSE: S) will launch its own NFC service. That conveniently coordinates with the arrival of the Nexus S (the only Android phone with an NFC chip) to Sprint’s stores.
~ Vive la France: The NFC trend isn’t just an American one. This week, French company Ingenico (EPA: ING), which makes NFC-enabled readers, made a bold move into the U.S. market by acquiring Hypercom Corporation’s (NYSE: HYC) U.S. payment systems business.
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Quoted in NFC News, Ingenico calls the acquisition a “major step in its goal to increase its activities in the U.S. market and accelerate the adoption of NFC.”
~ Talk About a Head Start: Privately held company, ViVOtech not only manufactures NFC reading devices, but also the software that supports NFC implementation, too. In addition, it lays claim to 800,000 NFC readers worldwide, including 80% of the NFC readers in the United States.
The bigger news here is that ViVOtech is planning an IPO as early as 2012, which technology analyst Tom Taulli predicts could be valued at $1 billion. As ViVOtech CEO Mick Mullagh states: “Mobile commerce will be bigger and grow faster than e-commerce did… This market will be absolutely huge.” We agree.
~ Research In Motion: Praying for an NFC Miracle: Even failing BlackBerry maker, Research in Motion (Nasdaq: RIMM) is banking on NFC adoption. The company’s next touchscreen phone, Bold Touch, comes with the technology built-in. For RIM’s sake, here’s hoping NFC boosts the company’s dwindling smartphone market share, which dropped by 4.6% between November 2010 and February 2011.
As MobileBeat asks, “Can we really ignore the fact that some of the largest technology companies are now betting on this technology?”
I think not. And as NFC’s reach expands, we’ll keep you updated on the best ways to play the momentum.
Our Chief Investment Strategist, Louis Basenese, is already tuned into the trend – and has been for a few months now. In The White Cap Report, he’s already recommended a stock poised to capitalize on the fast-growing mobile payment trend – and tells me he’ll soon add another one to the portfolio. Sign up for a trial subscription here and you’ll be the first to know when he does.