business man hand use mobile phone streaming virtual business neIn 1990, Sony patented FeliCa technology. By 1995, FeliCa chip smartcards included an operational version that enabled consumers to replace credit cards. In January of 2007, Apple announced release of the iPhone. Within a year, the company stock doubled from $89 to $179 per share. according to

By the time the technology reached the mobile phone industry, public usage should have been ready for acceptance. Yet according to Volume 9, Issue 2 of the Heinz Journal, only Japan actively embraced the concept of a mobile electronic wallet. In 2009, less than 1 percent of the U.S. public embraced near-field bill-payment opportunities. In the same timeframe, nearly 73 percent of the Japanese market made use of mobile phone bill-payment capabilities. For Japanese businesses, 2009 online mobile shopping netted better than $20 billion in income.

Modern Near-Field Communication (NFC) creates a whole new revenue source for retailers. NFC-enabled mobile phones allow consumer payment methods such as credit, prepaid and stored-value. The process provides:

  • Greater Exchange Efficiency – Scanning a smart phone reduces transaction time. Likewise, customers receive the benefit of a process that does not require consumer signature.
  • Retirement of Card Requirements – Although most Americans now carry some form of credit or debit card, paying bills by mobile phone eases the transaction, reduces the wait time and opens a larger pool of potential customers to your business.
  • Elimination of “Preferred Discrimination” – Many retail outlets continue to prefer payment via a specific type of card. The unified infrastructure of NFC mobile payment options removes such restrictions.

A Seemingly Limitless Future

NFC is not limited to local retail transactions. According to the Information Development Agency (IDA) of Singapore, public transportation, multimedia sharing and even the tourist business can benefit from the technology. IDA also predicts that future NFC projects will include:

  • Enabling banks, payment service providers and other businesses with extended leverage over Time to Market (TTP). As the mobile subscriber base increases, integrated mobile connections will improve.
  • Merging mobile and social network technologies with retail and F&B segments of business will enhance customer loyalty and help improve physical store activities
  • Better advertising opportunities developed by channeling advertising media and personalized offers directly through the NFC payment terminals.

NFC and Apple

Back in 2001, Apple introduced the iPod. By including legalized music downloads linked to iTunes and dedicated hardware, the company reduced marketing overhead while simultaneously offering the public a new service. It was a move that awakened renewed interest in a concept called the business model innovation. Yet today, Apple remains aloof to the benefits of NFC and the integrated features that make Google Wallet an interesting choice for the U.S. marketplace.

The recent 2013 merging of Apple and T-Mobile that provides Germany’s Deutshe Telekom with the options to move iPhone equipment through the four top U.S. carriers may change the situation. However, the forces driving the growth of the mobile industry may also further entrance Apple’s thoughts in the matter. According to resources at Wharton University of Pennsylvania, two macro trends are creating perpetual fears in the executive mobile boardrooms:

  1. The threat of expanding demands for expensive infrastructure build-outs during aggressive revenue growth slows
  2. The risk of a reduction in services and resources due to a communized device framework

If either of these scenarios reaches full-bloom, the margins for mobile network operators will collapse.

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