BusinessWeek recently reported, citing unnamed sources familiar with the project.Amazon may integrate the emerging technology known as NFC (near field communication) into its mobile applications, allowing customers to pay for items at point-of-sale using only their mobile phone. The technology is currently being explored by the company's Amazon Payments unit,
NFC is a wireless communication technology that allows for data exchanges between short distances and is the backbone of many upcoming mobile wallet initiatives. There are three ways NFC can be implemented on phones: either fully integrated into the handset, such as is the case with new phones like Google's flagship device, the Nexus S; it can also exist on the SIM card or on a microSD card inserted into a card slot.
Note: You can learn more about NFC on ReadWriteMobile, where we're running a series of articles exploring the technology and its uses. The first of those articles is here.
Amazon Thinking About NFC
If the BusinessWeek report is accurate, this news means Amazon is throwing its hat into the ring as yet another company moving into the NFC space. Last week, we reported how Google was ditching barcodes for NFC in its business listings service Places. The company is also reportedly working on its own mobile wallet service in conjunction with Citigroup and MasterCard.
Apple, RIM and Isis, a coalition of U.S. operators, are also working on mobile wallet programs, the former two only reportedly, but the latter very publicly via www.paywithisis.com.
The benefit of a mobile wallet service, such as the one Amazon may be building, is that it not only replaces plastic credit cards with a mobile phone, but it also allows retailers to immediately transfer rewards in the form of coupons, discounts, loyalty points and more to the handset used during the payment transaction.
Using NFC for Price Comparisons
Amazon's program, the report says, may also introduce a price-comparison feature which allows consumers to tap their phone on an item's NFC-enabled retail tag in the store in order to locate the item on Amazon.com. This is essentially how Amazon's mobile application works today, except that it allows users to snap photos and scan barcodes, not use NFC.
More news about the project, which is being researched by the Amazon Payments unit, will be revealed in the next three to five months.