Will RFID Lead to Near-field Communications (NFC)?

Mobile banking and payments is considered a promising area, in which near-field communications (NFC) is widely viewed as the pinnacle. NFC promises to turn the mobile phone into a secure credit card by enabling the exchange of data between devices over about four inches of distance. While companies work out the kinks to make it attractive for all members of the ecosystem, including carriers, radio frequency identification (RFID) tags that can be affixed to the mobile phone are cropping up as a temporary solution – one that Aite Group senior analyst Nick Holland says is extremely flawed.

“This is seen by the people who put the stickers out as some interim technology that will magically get us to NFC, whereas what is really required is a solid business case for NFC and a level of merchant penetration for contactless payments that makes NFC viable,” Holland said. “This, as far as I’m concerned, is a step in the wrong direction. This is not something that will accelerate NFC. If anything, it’s going to be a distraction.”

Companies including Blaze Mobile, MasterCard, First Data and, as of today, Alcatel-Lucent and Tetherball, are among those using RFID stickers to bridge the gap to NFC. Alcatel-Lucent (NYSE: ALU) announced today its touchatag venture will work with Belgacom mobile and micro payments company PingPing, to create an open model of application development for contactless cards and mobile payments. Through the partnership, Belgian consumers can use one contactless card or sticker to launch mobile payments or other mobile applications.