As the number of mobile phones steadily increase in the world and handsets are used for much more than calling and texting, Mobile Near Field Communications (NFC) offer users the ability to use their phone as a mobile wallet. However, even though consumers would welcome such solutions, NFC deployment is sluggish.

NFC is an open technological platform that enables short distance wireless communication between different devices. The technology was approved as an ISO/IEC 18092 standard in 2003 and has since then several specifications have been developed by e.g. ETSI, ECMA and the NFC Forum.

There are many different areas where NFC can be used, one example is an area which is currently under quick progression; namely mobile payment solutions. Several pilots are underway where mobile phones are used for payment on e.g. buses and subways, in convenience stores etc and essentially from one phone to another.

In 2007, GSMA launched an initiative aimed at providing guidelines for MNOs and SSOs regarding NFC. A white paper was published in order to develop a common vision of NFC and by doing so, prevent market fragmentation and facilitate the process of technological standardization and implementation.

As ‘ordinary’ mobile payment services (i.e. not wireless ones) are dominating traditional means of commerce in e.g. Kenya (where Zain’s Zap and Safaricom’s M-PESA have become the most common means of payment) the rise of mobile payment services in general and wireless NFC based services in particular have yet to gain momentum across the developed world (except in Japan where NFC has been partnered with Mobile Felica, a similar pre-existing system).

The main hurdle for wide deployment is the handset vendors. Since NFC is a hardware specification, it has to be incorporated into the handset during construction and this far only ten mobile phone models are NFC enabled (of which five are Nokia). It seems as if vendors are waiting for market reaction before making their move. Hence, unless some radical developments are seen, the forecast that one in six mobile subscribers will have an NFC enabled phone by 2014 seems a tad optimistic at best.

Also banks and MNOs need to be convinced to invest in deployment of mobile payment services. According to Sandy Shen of Gartner, this is not likely to happen without a successful business case. Some concern is that banks’ reluctance comes from the fact that NFC would compete with their existing credit card businesses.

Meanwhile, the outlook for public acceptation of NFC solutions is promising. In fact, it seems like people are expecting that mobile phones will be used for payments, and have been doing so for some time.

Using mobile phones for services other that just conventional conversation makes perfect sense considering the widespread use of handsets, in Western as well as developing countries. But time is running out for NFC to prove its full capacity.