"The whole mobile space is growing and as soon as equipment manufacturers begin to introduce near-field communication, you'll really start to see it take off at the point of sale," Ted Landis, senior executive, financial industry programs for payments and strategic cost reduction at Accenture, recently told us. Near-field communication or NFC is a short-range high frequency wireless communication technology that enables the exchange of data between devices about four inches apart. It can enable a cell phone to act like a contactless card such that payments can be made from phone to device.
As if on cue, Singapore-based near-field communication provider Cassis is announcing its entry into the U.S. market today. The company has done a lot of mobile NFC projects in Asia and Europe. In Japan and Korea, tens of millions of people use their mobile phones to make contactless payments, according to Allen Merrill, the new president of Cassis Americas, although they don't happen to use NFC. "People are increasingly living on their handsets," he says. "There are a lot of indications that the American market will develop and accelerate this year."
Cassis offers a software platform called Mobile Matrix and a service that provides "over the air enablement" of contactless payments and management and security for mobile payments. It can host the software and provide technical support and security services including encryption and embedded security.
Major competitors in this space include Gemalto, the big French chipmaker, and Vivotek, a contactless payments terminal maker. Cassis is working with device and chipmakers that contactless-payment-enable mobile phones.
The scary vision some of us have of contactless mobile payments — of walking through a train or airport terminal unsuspectingly as various kiosks and devices draw payments off our cell phones — is not going to happen, Merrill assures. "That would be scary," he says. Near-field communication by definition has a small range, so you have to wave the phone close to the device, he says. "Nobody's going to read a payment off your phone unless you put it somewhere where you want it read. And if you tap your phone to do a contactless transaction, dynamic encryption protects that phone." Merrill also points out that in such transactions, the phone never leaves the user's sight, whereas when one uses a debit or credit card, often one hands the card to a waiter, who goes off somewhere where you can't see what they're doing. "A lot of fraud occurs when the card is out of sight," he says. In addition, people tend to notice and report a missing phone much more quickly than they do a missing card.