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Network World - The "mobile payments" industry isn't really about payments. It's about personalized, commerce-related services delivered to a user's smartphone or tablet: Paying for something is just one of them, and arguably the least important for now.
At least that's the argument of two recent reports from Forrester Research, a research and advisory firm based in Cambridge, Mass. The authors say that a mass market in mobile payments is still nearly a decade in the future, and rosy predictions to the contrary ignore the complex hardware and software infrastructures, standardization, business models, and consumer education that are needed.
Instead, users are more likely to see a new generation of easier-to-deploy "contactless services" for mobile devices, such as a mobile transport "pass" for bus and subway trips, an access card or "digital key" or boarding pass, hyper-local couponing or tourist information, and sharing information and services directly with other mobile devices. These are services that can be deployed faster by vendors and used, and trusted, more easily by consumers, according to the authors.
Contactless services usually are premised on a very short-range wireless technology called Near-Field Communications or NFC. Smartphones running an app such as Google Wallet can be waived at an NFC reader attached to a cash register, for example, and a transaction charged or debited to an account.
Reiterating a 2009 Forrester prediction that "mobile contactless payments wouldn't hit the mass market for another decade," analyst Thomas Husson, writing in "NFC: What Lies Beyond Contactless Payments," says, "That prediction still holds despite numerous [industry] initiatives. ... We see NFC as merely a technology enabler for several types of mobile contactless services; we don't believe the majority of consumers will use mobile contactless payments before the end of the decade, even in the most developed countries like Poland and the UK."
One key reason is that "NFC alone won't create a more convenient experience [for shoppers]," Husson says. "What problem is NFC-based payment solving? For now, mobile contactless payments provide only marginal improvements to established systems like cash and credit/debit cards."
Given that fact, he says, "it is critical to infuse significant value throughout the purchase journey -- before, during, and after payment -- to provide a smart commerce experience. NFC is just a technology; mobile contactless payments have to be part of a broader move to a completely digital chain of commerce that combines not only payments but also digital receipts, personal finance management services, geolocalized coupons, loyalty cards, and much more."
(Husson has a blog post that summarizes some of the report's points.)
With iOS 6, announced in June, Apple introduced Passbook, a new feature that lets iOS users store digital coupons, boarding passes, tickets and loyalty cards in one place. It was widely interpreted as a "step toward a digital wallet," but at least for now it focuses on exactly the kind of services and conveniences that the Forrester authors predict consumers will readily embrace.