NFC vs Bluetooth Low Energy

2011 was meant to be “the year of NFC”  so was 2012 and 2013.
However,  it seems that earlier this year NFC ran out of steam as far as “mind share” is concerned.

When Google Wallet decided to drop support for loyalty cards  —  one of the key components of any m-wallet (and one of the core functions of ISIS wallet, via SmartTap) — it became clear that Google lost its interest in NFC and started looking at the alternatives: Google bought Bump – the technology that enables P2P interaction via accelerometers and cloud;  Google finally opened up Android to BLE (Bluetooth Low Energy – aka Bluetooth Smart).

Apple didn’t include NFC in their latest iPhone models.  Again, instead, Apple is currently betting heavily on BLE technology.

PayPal introduced BLE-based Beacon, specifically for retail payments (and marketing/advertising).

Tons of smartwatches are coming out soon, all with BLE, and  potentially  payment applications. Only a few smartwatches are expected to include passive contactless interfaces.

Projections for NFC-enabled phones vary widely (and are being revised downwards by most analysts) at the same time, almost every new smartphone model out there has BLE.

BLE, BLE, BLE… Does all that mean the end of NFC (in retail)? Well, that depends…

Before we get too excited about BLE, let’s consider the following. One of the key problems of NFC is lack of infrastructure in retail. Guess what: BLE infrastructure is… zero. Moreover, such forthcoming solutions as PayPal Beacon are not simple “plug and play” you still need some “add-on” to identify the customer who wants to make the payment, among the dozen of others in the BLE range. That’s where NFC seems to actually shine.

NFC is great for instant ad hoc proximity-based “peer to peer” communication.
Other alternatives come nowhere near in that respect. (For now…) There are many areas where NFC is a star: transit, access control, authentication, device pairing, device configuration.

So, what could make it or break it for NFC? EMV push in the US will lead to further gradual introduction of NFC payment terminals. NFC will come of age, but don’t expect miracles it could be too little too late.

On the other hand, if several major players unite to push (a) open, (b) low-cost (think $10-20), and (c) true “plug-n-play” alternative to NFC, based on BLE, that could seriously tip the scales and much faster than anyone can imagine.