Two very big developments are about to happen in the NFC space, and together they might eliminate credit cards as we know them.
Google has been courting the idea of NFC technology for a while, and it now seems poised to launch a potential game-changer (as Google is wont to do). The Wall Street Journal reported that an announcement from Google on Thursday will reveal its new NFC mobile-payment tech. The program will "launch first in New York, San Francisco, and potentially other locations, followed by a broader rollout," according to insiders who've spoken to the WSJ, with retail partners including "Macy's Inc., American Eagle Outfitters Inc. and the Subway fast-food chain." Stores taking part will have "upgraded terminals at the point of sale that can read the mobile devices and provide special offers."
Speaking at the TechCrunch Disrupt event today, Google's VP of Commerce and Payments Stephanie Tilenius noted that the company was "making a big bet on" NFC technology, citing recent Starbucks trials of NFC payments in London and other dry runs that have proven its potential. But Tilenius clammed up when questioned about the announcement Google is expected to make tomorrow, which may be a hint that Google is planning something big.
Sprint is tipped as Google's cell-phone partner in this endeavor, and such a powerful partnership will make a splash, given Google's dominance in both the smartphone sphere and the digital-advertising world. Ads are one component that makes smartphone-based NFC the future of payments, since they offer retailers a route to hyper-personal advertising, as well as ad-supported price drops (akin to Amazon's new Kindles).
Meanwhile ISIS, the consortium that includes Verizon, AT&T, and T-Mobile, has expanded its agenda for giving the humble credit card a makeover. Speaking to NFC World, the group noted it's "pretty drastically accelerating the scope" of what it's bringing to market. Its proposed system will work with existing credit card companies, and aims to become the "connective tissue" between the financial side of the tech, the cell phone networks, and the retail industries.
The Isis Wallet, which'll be available to any credit company, brand, or merchant, will act as a single point of integration between the customers, retailers, and banks. There's also scope for including loyalty and promotional campaigns such as coupons, with the wave-and-pay system effectively acting as a "one click" interface at stores: You'll waggle your phone before a sensor connected to the register, pay for your coffee, earn a loyalty point, and get an ad uploaded to your phone all in one maneuver. "Multiple" banks are on board, and the system is expected to launch next year.
Taken together, these developments show there's real momentum in reinventing how we pay for things. They also provide stiff competition for credit card reader and payments system Square, which is concentrating on a few retailers across the U.S. and is pushing its system as a simple way for everyone to accept payments from magnetic-strip credit cards. The Isis Wallet is a direct competitor to the Square Card Wallet, and will likely offer the added advantage of being able to accept payments by touching NFC phones together (enabling person-to-person transactions and making things easier for very small-scale merchants).
Certainly, by trying to build up an ecosystem of users and retailers, Square is trying to get out ahead of these advances in NFC tech. No matter who ends up leading this horse race, it really does look like the way we pay for things is about to change, and radically. The era of cash, and magnetic-strip cards, is quickly fading.
[Image: Flickr user consumerist]