Commerce Weekly: NFC delays give Bluetooth an opening

Why Apple and others could choose Bluetooth over NFC, NFC is too slow for the Tube, and PayPal expands its point of sale.

Here’s what caught my attention this week in the commerce space:

Apple, Bluetooth and the path of least resistance

Bluetooth LogoThe road to mobile payments, especially in the U.S., is mired with speed bumps in terms of consumer security concerns with NFC and the fact that the technology isn’t yet in the hands of enough consumers and retailers to get a foothold. The solution, however, may not be expanding a new technology, but rather opting to not reinvent the wheel.

Recent speculation indicates this may be the tactic adopted by Apple, which some have argued is poised to disrupt the space. ResearchFarm analyst Pablo Saez Gil told Mary-Ann Russon at ComputerworldUK that Bluetooth technology makes more sense for Apple than NFC. He said Bluetooth would work in a similar fashion to NFC tags, but would allow for “long-distance connections between devices of up to 50m.” Russon observes additional inherent advantages:

“The idea is that Apple could introduce an app that enables the Bluetooth transaction but relies on the cloud. This would completely negate the need for NFC, cash registers or even credit cards and thus allow retailers and SMEs to bypass costly hardware upgrades.”

Making mobile payments more ubiquitous using existing technology not only would help bypass the technology growing pains, but using technology that consumers are already comfortable with would largely bypass the learning curve and may help alleviate security concerns. Marguerite Reardon at CNET took a look at the NFC issues hindering Google’s Wallet and noted an additional problem with NFC that could be bypassed with Bluetooth: politics. A mobile payment company CEO told Reardon that with NFC payments, it all comes down to “who owns the customer.” With the rapidly expanding competition in the fledgling NFC payment space, opting for a path of less resistance with Bluetooth technology may very well end up being the mobile payment solution holy grail.

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NFC is too slow for the London Underground

Discussion of NFC’s growing pains wasn’t isolated to in-store mobile retail payments this week — it seems the technology is having growing pains in the transportation payment space as well. IDG News’ Mikael Ricknäs took a look at the situation in a post at PCWorld. He reports:

“NFC still remains a technology that is just around the corner — a corner that never seems to come, according to [Shashi Verma, director of customer experience at Transport for London (TfL)]. For any contactless technology to work in the London Underground, read speed has to be faster than 500 milliseconds, he said [at the Open Mobile Summit conference in London].”

The speed was achieved with an earlier model Nokia phone, Ricknäs reports, but Verma said that a shift in standards in 2008 created a physical hardware gap that slowed down the read speed. Verma also said that NFC has user issues as well: “The technology is still too difficult to use for ordinary consumers and if its proponents want NFC to become a mass-market technology worldwide it has to become less fidgety to use.”

PayPal signs on more partners, launches a new payment solution

PayPal announced 15 new national (U.S.) retail partners for its mobile payment solution this week, including Abercrombie & Fitch, Barnes & Noble, JC Penney, and Office Depot. The press release noted the company’s point-of-sale beta test with Home Depot has been successfully rolled out to every Home Depot store across the U.S. Part of the company’s mobile payment success thus far can be attributed to its ease of use for consumers and merchants as well as on its cost-effectiveness for retailers.

Consumers will be able to pay at participating stores with a physical PayPal Card connected to their PayPal account or via their phone number with a PIN. As a post at AdAge points out, PayPal ultimately hopes to expand their mobile payment solutions to better engage consumers with loyalty programs as well as with discounts and coupons while shopping.

PayPal also rolled out a mobile payment option in the U.K. this week: the PayPal In-Store App. The app generates a unique barcode for a purchase that retailers can scan for payment.

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