NFC could replace mobile money payments

Near Field Technology (NFC) could outpace mobile money as means for money transfers in Africa following its convenience and fast-paced adoption by users.

The NFC, like Bluetooth, allows the wireless transfer of information between electronic devices at close range.

Following its launch by Absa Bank late last year, the technology has found application, mostly, at point of sale for contactless payments in supermarkets, restaurants avoiding credit cards and cheques.

The technology enables faster transactions, shorter queues, increased levels of security and the ability to electronically track their spending habits according to an earlier analysis by Absa Bank.

The technology has been largely used in South Africa including during the 2011 Oppikoppi Unknown Brother rock festival. Event organisers, merchants and system developers reportedly praised the system.

Financial analysts argue majority of Africans are likely to adopt the system given its convenience compared to mobile money transfers. Mobile moneys have been known to provide difficulties to users including failure by top retailers to honour it due to delays in cash transfers.

According to the recent Berg Insight survey, 700 million NFC enabled handsets expected to be shipped in 2016 and a global rise in smartphone adoption even in Africa will see the technology burst. More than 735 million subscribers in Africa alone are expected to adopt the service in Africa alone – adding to 90 percent of Africans owning a mobile phone.

Users in Africa will in addition be able to pay by their phones instead of cash, cheque or credit cards.
Herman Singh, CEO of Beyond Payments, said the convenience of the system would stir its rapid adoption by firms, and even customise it for Africa.

Ben Lyon VP Business Development at KopoKopo, a mobile money payment integration system, said:”People need to use their money for transactions after receiving it. The idea of just safely transferring it from one person to another holds little water.”

In South Africa, the South African Nearfield Initiative was set up to accelarate the mass market deployment and adoption of NFC and according to Patrick Leroux, these are signs Africa could be readying itself to fully adopt NFC.

South Africa’s ABSA, recently started rallying behind the system with a virgin trial in the country. Safaricom and Orange Kenya are also working on implementing NFC.

Last month, GlobalPlatform, a secure chip technology applications firm partnered with NFC Forum to harness the interoperability of NFC for various players in the industry and the increase of NFC enabled phones in the market is set to speed up new NFC facilities.

Since 2007’s M-Pesa, top Kenyan money, debut in Africa, mobile phone service providers have replicated the money transfer service resulting to record successes and failures.

Provided by Safaricom, a Kenyan based mobile service provider, M-Pesa heralded the birth of other mobile moneys including South Africa’s Vodacom M-Pesa, Bharti Airtel’s Airtel Money, Essar’s YU Cash, Orange Telecom’s Orange Money. Others include Mozambique’s MKesh and MTN’s Mobile Money.

In Tanzania, Tangaza Money introduced a network neutral mobile money transfer similar to Sierra Leone’s Splash Mobile.

The trend may however refocus on NFC following its launching by Absa Bank as the first ever NFC user trial in collaboration with Visa, MasterCard and Europay of the system.

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