Someday, your teenage child (or grandchild) will stumble across a credit card in an old desk drawer and ask you: “what was this for?” That day is imminent. The extinction of the credit card will officially begin tomorrow, September 9th. Is your business ready?
As you’re probably aware, tomorrow is when Apple will announce a bunch of new products, updates and services. The company, according to leaked reports, intends to intoduce a new “iWatch”, a bigger, more durable iPhone and further details on its OS operating system and Mac hardware.
But the biggest news that will affect us, as retailers, business owners and consumers, will be the company’s support of NFC (Near Field Communications) for mobile payments. NFC, which has been around for years, allows two devices to transfer encrypted data at short range using radio waves. Up until now the major backer of the technology has been Google. But as popular as Android devices are around the world, it’s the iPhone that rules in the economies (i.e. the U.S.) that pay the bills. And Apple for years has instead resisted jumping on the NFC bus. That will change this week, according to all accounts. And the impact will be fast and enormous.
Already, there are reports that Apple is rolling out iBeacon transmitters and NFC technology to its retail stores around the country. “Disney's retail stores are also said to be receiving new credit card machines that support NFC, which will also likely integrate with Apple's new mobile payment service. Reports from this past week have also indicated that Apple will be partnering with a number of other retailers for the service, including Walgreens, CVS, Nordstrom and more. Apple has also established deals with major credit companies such as Visa, MasterCard, American Express, and credit card issuers to support its mobile payments service.”
The mobile payments market is expected to reach $1 trillion by 2017 and there is plenty of room for others. Apple and Google won’t be the only game in town. But their devices will now be more easier for innovative companies like Amazon , PayPal, Twitter and Facebook to expand their offerings of NFC backed technologies. The good news for entrepreneurs is that these great companies can now go head to head on the same playing field, using the same standardized technology.
By adopting NFC technology Apple opens up opportunities for entrepreneurs and startups who want to develop new software and sensors that can change the way devices “talk” to products in the warehouse, items on the store shelves and the clothing that we wear not to mention our blood pressure, heart rate and other vital signs for our doctors to evaluate. With this technology now on all of our smartphones we can not only get rid of our credit cards, but our keys, membership cards, drivers’ licenses and wallets. But first, it’s payments.
And with tomorrow’s announcement, large and small retailers will now be able to invest in NFC software and hardware knowing that it has a long term future and an enormous market of customers (both iPhone and Android users) who can take advantage of it. Instead of the hundreds of mobile payment applications that have been confusing the marketplace for years we’ll have just a few built on the same, consistent platform where a retailer can now standardize. Credit card numbers, now encrypted on your device will become more difficult to steal. All of this is great news for my clients and for you, as long as your business is ready. Using your credit card will soon go the way of the rotary telephone and visiting your bank branch to make a withdrawal.
How soon will this happen? Very soon. NFC is already commonly used “in Japan, Western Europe, South Korea and Australia, with NFC initiatives underway in 20 additional countries.” Many popular point of sale applications for small businesses, like QuickBooks POS, ShopKeep and AccuPOS already have NFC technology capability. The infrastructure is there. Soon, both Android and iPhone-toting customers will be demanding to make payment this way. And smart retailers who intend on growing will be providing this capability.
“One word.” Mr. McGuire told Benjamin Braddock in 1968’s The Graduate. “Plastics. There’s a great future in plastics.” Maybe back then. But not as much now. At least, not according to Apple.
Besides Forbes, Gene Marks writes daily for the New York Times and weekly for Inc.com.
