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In many countries, recently, the technology of contactless mobile payments NFC has become mainstream, terminals for paying for goods with built-in NFC devices appear in stores. The world's largest mobile operators AT&T, T-Mobile and Verizon have signed an agreement with the NFC Forum and are working on developing solutions using this technology to make mobile payments ubiquitous.
However, tech giants Apple, Google and various startups that make mobile payment applications (such as Square) continue to diligently ignore NFC altogether, and focus on software and hardware solutions built on other technologies.
There is an explanation for this phenomenon, writes expert Michael Foster. Apparently, we are unlikely to see mobile payments become the standard around the world in the next few years. So why do mobile operators love NFC so much? There are three reasons for this, but they all boil down to one: profit.
Driving out old players
Square, Paypal and small mobile payment startups have created technology that allows people to use their bank cards for mobile payments. Smartphone developers (Apple, Google, and others) enter into agreements with retailers, banks and credit card issuers to use their products on their devices.
For mobile operators, the situation looks different. The user of an NFC device makes a payment with money from a mobile, and then can replenish funds directly from his current bank account. In this situation, there is no need for Visa, Mastercard, Verisign or any other credit card issuer. It is a transaction between the user, the operator and the seller.
In other words, your mobile operator becomes your payment operator - which means that mobile operators can steal a huge chunk of business from the credit card industry. Given the trillions of credit card transactions in a year, this is a strong motivation to fall in love with NFC technology.
The habit of not changing your device
If you use an NFC phone as a payment device, in fact, you are tied to it. If you use the Paypal or Apple Passbook app to pay, you can use your username and password on a different device or location to make a payment.
It is beneficial for mobile operators to bind the user to the phone, for two reasons. The longer you use the device, the less money the operator will have to pay the phone makers. In addition, the longer you use your smartphone, the less likely you are to change carriers. If you are chained to your NFC phone, it is more difficult for you to switch to another provider and permanently terminate your contract. People just don't like unnecessary fuss.
Data trading
All financial companies use the data that clients give them. When you buy things, your credit card issuer and bank account operator know what you bought, when, and from whom. They can combine this data, analyze it and sell it, for example, to marketers.
Big data is big business, and having access to that data is really important. By running the mobile payments ecosystem, cellular operators are getting another product they can trade - your data. They can sell them to banks, retailers, credit companies, and in general anyone who asks.
However, tech giants Apple, Google and various startups that make mobile payment applications (such as Square) continue to diligently ignore NFC altogether, and focus on software and hardware solutions built on other technologies.
There is an explanation for this phenomenon, writes expert Michael Foster. Apparently, we are unlikely to see mobile payments become the standard around the world in the next few years. So why do mobile operators love NFC so much? There are three reasons for this, but they all boil down to one: profit.
Driving out old players
Square, Paypal and small mobile payment startups have created technology that allows people to use their bank cards for mobile payments. Smartphone developers (Apple, Google, and others) enter into agreements with retailers, banks and credit card issuers to use their products on their devices.
For mobile operators, the situation looks different. The user of an NFC device makes a payment with money from a mobile, and then can replenish funds directly from his current bank account. In this situation, there is no need for Visa, Mastercard, Verisign or any other credit card issuer. It is a transaction between the user, the operator and the seller.
In other words, your mobile operator becomes your payment operator - which means that mobile operators can steal a huge chunk of business from the credit card industry. Given the trillions of credit card transactions in a year, this is a strong motivation to fall in love with NFC technology.
The habit of not changing your device
If you use an NFC phone as a payment device, in fact, you are tied to it. If you use the Paypal or Apple Passbook app to pay, you can use your username and password on a different device or location to make a payment.
It is beneficial for mobile operators to bind the user to the phone, for two reasons. The longer you use the device, the less money the operator will have to pay the phone makers. In addition, the longer you use your smartphone, the less likely you are to change carriers. If you are chained to your NFC phone, it is more difficult for you to switch to another provider and permanently terminate your contract. People just don't like unnecessary fuss.
Data trading
All financial companies use the data that clients give them. When you buy things, your credit card issuer and bank account operator know what you bought, when, and from whom. They can combine this data, analyze it and sell it, for example, to marketers.
Big data is big business, and having access to that data is really important. By running the mobile payments ecosystem, cellular operators are getting another product they can trade - your data. They can sell them to banks, retailers, credit companies, and in general anyone who asks.
