Nokia, a company that included support for NFC in devices long before it was cool, has surprisingly revealed that its newest NFC-enabled phones, the C7 and N9, won't be able to support mobile wallets or mobile payments.
The issue at hand is hardware-based: the phones don't include either an embedded secure element (the secure storage area where sensitive information like your credit card details are stored) or Single Wire Protocol (SWP), which would be needed in order to support an NFC-enabled SIM card provided by a mobile carrier.
This post assumes you are familiar with the term NFC as well as the technology's use in mobile payments. If you're just starting to learn about NFC, you should begin here with the first post in our ongoing NFC series to get caught up.
No Mobile Payments for the N9 or C7
In an interview with NFCWorld, Nokia UK and Ireland's head of services, sales and marketing Rupert Englander explained that the company is still exploring the potential for NFC.
"Nokia's view is NFC is about more than just mobile payments," he told NFCWorld. "We're probably a little while away from being able to go into a shop and easily use our mobile phone to pay for things with NFC. We think the phone as the mobile wallet, where it's simple to buy and it just works, is 12 to 18 months away. There are various trials out there and some services, like Orange's Quick Tap, but there are restrictions, like you have to be an Orange subscriber, a Barclaycard customer, and can only shop in certain places."
Because there was no standard in place for secure NFC payments when the phones went into production, Nokia decided instead to use an open, unsecured chip and focus on NFC propositions like "tags and Bluetooth pairing."
Not Supporting NFC Payments is Practical (but Boring)
To be fair, Englander is not wrong: NFC is still very much an emerging technology whose real-world use, especially in terms of mobile payments, won't be anywhere near mainstream in 12 to 18 months. According to NFC software-and-systems company ViVOtech's CEO Mick Mullag, it will be 2 to 3 years before we reach a point of full collaboration between all the players involved, including the banks, handset makers, operators, Web players, etc. Analysts at Gartner also believe adoption will be slow, forecasting that less than 10% of mobile users will be using NFC for mobile payments by 2015.
That said, NFC is already making waves among some big-name players, like Google (Google Wallet), Visa (Visa's Digital Wallet), PayPal, T-Mobile, Verizon & AT&T (Isis) and others. In other words, there will be more services that can use NFC before there is a mass of NFC phones.
Most of these services will begin in the U.S., however, so Nokia's decision to forgo mobile payments on the N9, the Meego-based phone which is not even expected to arrive in the U.S., and the T-Mobile-only C7 (aka the "T-Mobile Astound"), will be of little impact here. What will matter more here in the U.S. and will speak broadly as to Nokia's vision for how it wants to be perceived when it boldly re-enters this market later this year with its first Windows Phone device, is whether or not that device will include NFC support for mobile payments.
For those unaware, the forthcoming code-named "Sea Ray" Windows Phone device has been leaked, and looks nearly identical to the N9's hardware, which could mean similar internals as well.
While there are certainly plenty of use cases for NFC outside of mobile payments - Nokia is the first to support the NFC-enabled game "Angry Birds Magic," for example - choosing not to support mobile payments technology places Nokia phones more into the "status quo" group of devices (including the more boring entrants like the BlackBerry Bold 9900 and 9930), than the group of "cutting edge" ones, like Google's flagship phone the Nexus S. Even if it's not practical, we hope the "Sea Ray" phone will arrive ready to replace our wallet, even if it's years before it really can.
Image credit: Technet.hu.