Prepare for phone payments now, report urges

Near-field chips ready to replace the credit card, say researchers

Consumer-facing businesses should be gearing up for payments via mobile phones this year, advises a report published today.

The report, NFC Business Models, shows that mobile operators and handset makers are ready to roll out phones equipped with near-field communication (NFC) chips that will act as a contactless cashless wallet for consumers.

"Mobile network operators, banks, handset manufacturers and technology providers around the world are all planning to create major new revenue streams by providing consumers with these mobile wallets," said Sarah Clark, author of the report. "But understanding of the business models that are most likely to succeed is still in its early days."

Everything Everywhere, the merged Orange and T-Mobile network, today announced the rollout in early summer of an NFC-based phone payment service with Barclaycard, which has been pushing contactless payments for two years.

"We're making something that's been talked about for many years a reality and very soon, using your mobile to buy a sandwich, a cinema ticket or, in time, even something bigger like a computer will simply be the norm," said Gerry McQuade, chief development officer of Everything Everywhere.

NFC technology will change "the way we decide what products to buy, where we choose to buy them and how we choose to pay", said the report's publisher SJB research.

Consumer-facing businesses such as retailers, transport operators and service providers will have to work out how to deploy contactless terminals, strike deals with mobile networks and work closely with banks, the report advises.

"The stakes are high and success will rely on meeting the needs of three key groups – consumers, merchants and the widest possible range of service providers," Clark explained. "The companies that succeed will be those that take the time to gain an understanding of the needs of each of the parties involved and then design an infrastructure that provides a [winning] solution for all."