Near-future boom for near-field?

GRAPEVINE, Texas — The idea of a single device that handles all of a consumer's electronic transactions — one machine to make phone calls, pay bills, buy products and even open turnstiles — is something of a holy grail for communications providers, and for some time now the focus has been on bringing that level of functionality to the cell phone.

There are three key attributes that retailers, transaction processors, mobile providers and just about everybody else on the business chain want to see in the phone of the near-future: mobile banking (checking funds and manipulating bank accounts), mobile payments (waving a phone at the POS instead swiping of a card), and mobile marketing (sending targeted messages to the handset based on who, where and when).

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McCarthy showed photos of a trial underway in San Francisco, in which Sprint issued NFC-enabled phones to 230 customers. The phones contain BART (Bay Area Rapid Transit) pre-payment data, meaning a user can simply wave his phone over a turnstile instead of carrying a separate prepaid card; they also hold a prepaid account for Jack in the Box restaurants, and interact with Jack in the Box digital signs in the bay area.

That's a specific set of applications in a very specific geographic area, but both men urged all retailers to start thinking today about how they are going to embrace NFC tomorrow. McCarthy noted that there are 3 billion active handsets worldwide — compared to only 1.25 billion active credit and debit cards.

"We're talking about the ability to reach a huge portion of the population that doesn't have plastic," he said.

"The main benefit to the retailer, though, is you can drive the customer to use the payment method that costs the store less," he said.

McCarthy predicted several times in his speech that 2009 would be the year of the NFC-enabled handset, with something that looks like mass adoption taking place late that year. That's just one opinion among many — market research firm ABI Research recently said NFC-enabled phones would account for about 20 percent of the worldwide market by 2012.

But both McCarthy and Khan pointed out that a phone doesn't have to be manufactured with NFC functionality in order to reap the benefits; both showed how a small sticker, placed on the inside of the battery shield or the back of the handset, can retrofit any phone with all of the benefits NFC has to offer.

And adoption will surely be helped by the fact that wireless carriers have so much to gain. McCarthy said the cell phone market is effectively saturated — everybody who needs a cell phone pretty much has one — but relatively few mobile phone users have data plans, which would be needed to take advantage of NFC features. That represents a big opportunity for wireless carriers to add additional services to the monthly bills of its existing customer base.

"There's huge structural pressure coming from the carriers to make this happen," he said.