It may not jolt faster acceptance of Near Field Communication-based payments at the point of sale, but the introduction of other NFC capabilities should at least increase merchant and consumer interest in the technology.

Indeed, as merchants and consumers see the cool things NFC can do, both should get more used to its tap-and-go nature via smartphones, and that could help moves to make NFC chips common in payment terminals relatively simple.

A pipe dream? Perhaps.

But the various uses for NFC continue to play out with new service rollouts.

Samsung Electronics Co. Ltd., for example, on June 13 announced its launch of NFC tags called TecTiles and an accompanying programming application consumers download for use on Samsung Android-powered NFC-enabled phones.

Consumers may program TecTiles to automate certain “shortcut” functions on a smartphone, such as checking in on Foursquare, a location-based social network website that rewards consumers for checking into a venue; sending a text; or changing phone settings, Lesli Benefield, a Samsung account executive, tells PaymentsSource.

“These tags are not attached to phones,” Benefield explains. Rather, TecTiles are stickers consumers can program using Samsung’s TecTiles mobile application, available for download at Google Play, she adds.

The NFC chip inside of a phone communicates with the NFC chip inside of a TecTile, allowing the phone to program the tag to support the desired function, Benefield notes.

“The NFC chip in the TecTile holds 1KB [1,024 bytes] of memory, the largest capacity available for such a chip,” Benefield contends. As such, the TecTile can support multiple functions at the same time, such as automated settings on the smartphone, she adds.

The TecTiles offer consumers numerous services, including the ability to program automated messages from their smartphones, such as a child notifying a parent he has arrived at school or a parent alerting family members he is on his way home from work.

In addition, smartphone owners can place TecTiles on nightstands and program them to set the phone alarm automatically or dim its display lights, according to information provided by Samsung. Consumers can reprogram a TecTile or lock it into a specific function.

More relevant to payments, merchants may use TecTiles to enable consumers to enter rewards programs or to download discount offers or promotion messages.

For example, restaurant owners could place a TecTile on a menu, enabling consumers to tap the tile with their smartphone to obtain an automatic discount or to redeem a coupon for signing up to follow the restaurant on Twitter or Facebook, Samsung stated.

Samsung is selling TecTiles direct to U.S. consumers in sets of five for $14.99 online. They also may buy them at AT&T Inc., Verizon Wireless, Sprint Nextel and T-Mobile USA Inc. stores.

The more services NFC can provide, the more it stays in merchant and consumer sight lines, notes Brian Riley, senior research director and analyst with Needham, Mass.-based TowerGroup. However, Riley isn’t ready to view it as a way to accelerate NFC acceptance in the payments world.

The TecTiles NFC tags likely will touch off “a lot of gimmicky stuff,” but NFC still won’t be commercialized as a payments technology for another three years in the U.S., he tells PaymentsSource.

“Early adopters will use the TecTiles, and they do tie in with the whole mobile business model,” Riley suggests.

A product such as TecTiles, or something similar, also sets the stage for their use in museums or places like Disney World to provide exhibit information, allow merchant discounts or initiate future payments, he adds.

Regardless of whether TecTiles spark more consumer interest in NFC, the technology will continue to be established in payments, Riley contends.

“NFC is a definite standard,” Riley says. “It’s important to remember that EMVCo has a requirement for NFC acceptance, so you know it’s getting established in that area as well.”

Owned by American Express Co., JCB International Credit Card Co. Ltd., MasterCard Worldwide and Visa Inc., EMVCo LLC establishes and maintains specifications for EMV integrated circuit cards to ensure chip-based card or mobile payments operate the same globally at point-of-sale terminals and ATMs.

NFC technology also has a significant rooting section in the form of the Smart Card Alliance, which established the Mobile and NFC Council to provide education about the various NFC uses and to advise organizations implementing the technology (see story).

For its part, Samsung is banking on the 2012 Olympics in London, opening July 27, to showcase NFC capabilities through a partnership with Visa in which the electronics company will supply Olympic athletes and VIPs with NFC-enabled Samsung phones to make contactless payments during the games (see story).

What do you think about this? Send us your feedback. Click Here.


Subscribe Now

Authoritative analysis and perspective for every segment of the payments industry

14-Day Free Trial

Authoritative analysis and perspective for every segment of the industry