Why the iPhone 5 means that NFC won’t grow as fast as expected

I think we’ve already forgotten that it took so long for us to get to the year of the mobile that was 2010, that we’re expecting similar speed in the roll-out of mobile payments solutions.

Everyone and their grandmother expects that in the next year or two, your mobile phone will become your wallet and your credit card and that in order to pay, all you’ll need to do is wave it at a point of sale (POS) terminal or at another mobile handset, so that money can be magically transferred from your bank account.

Credit cards and cash are apparently finally heading for the same heap as the VHS tape, the vinyl LP or the cheque (minus 10 points if you still have a cheque book). The technology standards that are in the lead as the enablers for this massive disruptive change are titled NFC.

Tech analysis company Juniper Research reduced its estimates of the value of NFC mobile payments by 2017 within a year — solely because the iPhone 5 didn’t include support for these technologies! Did we forget that the VISA card was launched in 1958 and we’re still nowhere near to full credit card adoption? Things in money land do not change that quickly.

So why the change of mind? Juniper quite correctly contends that Apple has recently become the key driver of the adoption of mobile consumer technology. The iPhone was not the first touch-screen mobile phone, but it did recreate the category, made it a highly desirable form factor that is still dominant for its desirability and profitability in the mobile phone category, five years after launch. (Remember when some customers still professed to want a BlackBerry with a QWERTY keyboard and not a touch screen – minus another 10 points if that was you!)

A similar argument holds for the iPad, which created massive demand for a whole new category of mobile consumer devices that didn’t exist before the iPad was launched in 2010. I recall holding my original iPad in my palms and wondering what I was going to do with it, but I sure did want one.

Juniper contends that without the brand, marketing and fanboys with deep pockets that Apple would have brought to the NFC party, widespread NFC adoption is delayed by at least another two years.

What makes this particular story even more interesting, is that the future of what is more widely termed “proximity mobile payments” is far from settled — Apple was recently granted a US patent for an alternative to NFC. We’re likely looking at a new VHS vs BetaMax or Blue Ray vs HD DVD standards battle, where the winner gets to set the high-level technology agenda and benefits from the worldwide licensing revenue.

You can safely buy a new wallet this holiday season – you’re going to need somewhere to put your cash and credit cards for at least another 2 years.