Back in April I wrote a blog post called Predicting the Future of Mobile, in which I discussed the potential of NFC technology for wireless communication between mobile devices. This seems to be the next hot thing sweeping through the mobile technology world, likely to grow as big as WIFI, GPS, and BlueTooth. The most exciting usage of this new technology is touch-to-pay mobile payments from a cell phone. The physical chip that is required for NFC to work is only in the newest model phones, representing a tiny fraction of all cell phone users. But excitement about this possibility has lead creative entrepreneurs to innovate and come up with ways to allow mobile payments with existing smart phones.



PayPal – Smartphones all have mobile web browsers, and although it can be challenging to enter all your payment information manually on those tiny screens, apparently an enormous number of transactions are being made each day. PayPal projects to receive $3B in mobile transaction this year, with a current rate of $10M a day.

Square – With a physical device that plugs into your smartphone’s headphone jack, Square allows you to swipe a credit card for payment on the go. Founded by Jack Dorsey, one of the co-founders of Twitter, Square has been picking up funding from some serious investors and the company is now valued at $1B.

Card.io – A brand new startup company has figured out a way to allow mobile payments without a physical device. The service provided by card.io takes a photograph of a credit card and analyzes the image to extract your account information. This data gets uploaded for verification. This service is just launching now, but has the potential to be very popular with existing smart phone users.

Foursquare – Teaming up with American Express, Foursquare’s 10M users can now receive discounts on the goods they buy after checking in to the venue on Foursquare. By linking their Foursquare account with their Amex account, users automatically receive a credit for the discount amount on their next month’s credit card statement.

Currently there are just a few models of mobile phones that include the hardware to make NFC tap-to-pay transactions. All of these phones run on the Android platform, and it is likely that the next iPhone model will support the technology as well. With 500K new Android activations a day, it won’t take long before NFC users are a significant number of mobile phone users. But it will take more than just the phone. An entire infrastructure needs to be built so that businesses are equipped to accept this payments. The fact that Google and its partners recently raised $24M to get this project off the ground is a good sign that it’s happening sooner than later.

But just how long will it take before wallets are a thing of the past? Industry experts predict that annual NFC payments will reach $50B by 2014, and according to PayPal, the wallet might become obsolete by 2015. With or without NFC technology, mobile payments are booming and we can expect the trend to continue into the unforeseeable future.