NFC Faces 'Uphill Battle,' But Reports of Demise Are 'Outlandish'

By Craig Galbraith Comments

PayPal president David Marcus raised quite a stir this week when he predicted that near-field communications (NFC) technology is on its way out, saying NFC for mobile payments will "fail to gain mass adoption." In fact, we won't even be talking about it after 2013, Marcus said.

In a blog on Monday, Marcus asked, "Is tapping a phone on a terminal any easier than swiping a credit card? I don’t think so ... " and adding that it neither solves a problem for consumers nor does it "[provide] additional value to encourage me (or anyone else for that matter) to change my behavior."

PayPal, which recently announced an in-store mobile payment system, decided against using NFC.

"Admittedly, NFC faces somewhat of an uphill battle before it can gain traction in mobile payments. But to rule out the technology all together is outlandish at best – especially given the interest it continues to garner from all facets of the mobile money community, noted Jordan McKee, an associate analyst with Yankee Group, commenting on a Computerworld article about Marcus' NFC prediction.

"Simplicity and convenience, the hallmarks of NFC, are difficult to overlook for merchants and consumers alike, thus positioning it well for future adoption," McKee added.

Mobile payments have gained traction in Europe and some emerging markets much faster than in the U.S., where consumers have been more concerned about security issues.

Follow editor Craig Galbraith on Twitter @Craig_Galbraith .

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