Remember NFC? That was a bullet point which Samsung used to compare the superiority of Samsung’s Galaxy S III to Apple’s iPhone (which does not support NFC). Tech pundits had a field day when the iPhone 5 was announced– sans NFC. Why doesn’t Apple support the emerging standard? Because NFC just doesn’t work in the real world.
To make it easy for smart phones to become an acceptable way to pay for things in retail stores requires that the sun, stars, and moon all line up at just the right time.
Retail outlets needs a way to capture customer information (to replace the credit card swipe). Smart phones need a way to send information to retail outlets. And, somewhere in between, there needs to be an account that tracks expenditures and pays the freight.
By and large, NFC does not cover the bases so Apple is building their own system. Why build their own? Apple loves a shiny show ‘n tell. And lock-in.
Lock-in? Yes. Apple has a few hundred million credit card numbers, all of which are attached to one Apple store or another, and iOS, iTunes, and the Mac App Store make it drop dead easy to buy from Apple.
Apple’s Passbook app is new but already installed on nearly 100-million iPhones with iOS 6. The idea is to use the app to store coupons, boarding passes, tickets, and– drum roll, please– make payments.
In other words, very quickly, Apple can make Passbook do what NFC doesn’t really do yet. Make it work.
Apple has plans to update their in-house EasyPay point-of-sale system which allows Apple’s retail store employees to capture payment card codes from iPhone and iPod touch devices running Passbook.
For now, Passbook is a mostly closed system, with a handful of retailers and other businesses on board. But tying payments to Passbook opens the door for in-store purchases, first at the Apple Store, then, perhaps Starbucks, and other progressive retailers with the capability to tap into Passbook technology.
The key to success in any new technology endeavor is a critical mass. Apple can get the mass started by bringing a payment system, the device and app, and customers by the tens of millions. That mass makes it attractive for retailers to hop on board.
Sounds good, right?
I have my doubts if common adoption will ever hit a critical mass of acceptance at the retail level.
While Apple may have nearly 200-million iOS customers, credit card companies and banks have many, many hundreds of millions of customers who use their credit cards the old fashioned way and it works rather well for store and user, so the incentive to switch to another system or add a system is nominal, hence NFC or Passbook will be unlikely to gain much traction among the great unwashed masses of card-toting humanity.