Series 15 – Episode 9 – The evolution of device-first payments

McCamon highlighted the NFC Forum’s pivotal role as a global standards organisation for contactless technology. With over 600 members, including major brands such as Apple and Google, the Forum's work underpins many everyday technologies.

"When you tap your phone at a payment terminal, you're using some of our work," McCamon noted. The Forum's standards ensure that contactless payments, whether via smartphones or wearables, are secure and seamless.

One of the significant revelations from the NFC Forum's latest consumer research is the shift from card-first to device-first payments. Historically, contactless cards were the preferred method for such transactions. However, McCamon pointed out a foundational shift: “What we have found is that most people would prefer to use their handset or wearable to pay and not a card.” This trend is particularly pronounced in the wake of the COVID-19 pandemic, which accelerated the adoption of contactless payments as consumers moved away from cash.

The survey, conducted across nine countries, revealed that over 80% of respondents had used contactless payments via their mobile devices. This high adoption rate indicates that contactless payments have moved beyond the early adopter phase and are now firmly in the mainstream. McCamon explained: “If you're not doing contactless payment, you're kind of very slow to the table.”

The survey also highlighted significant regional differences in the adoption of mobile payments. For example, South Korea, Japan, and the UK are leading the way, while southern European countries like Italy show slower uptake. McCamon attributed these differences to local preferences and the varying popularity of mobile payment solutions. He explained: “In markets like Korea, Samsung Pay is very important, whereas in China, WeChat Pay dominates.”

One of the early barriers to adopting contactless payments was concern about security. However, McCamon emphasised that these payments are now highly secure, partly due to the short range of NFC technology. "NFC Forum standards are very much user intent-based technology. Our range is only about five millimetres, which makes it very secure," he said.

Furthermore, the security of contactless payments is enhanced by the biometric features of mobile devices, such as fingerprint recognition or facial scanning. “If I steal your handset, I can't get to the cards because I have to unlock the phone with biometrics,” McCamon added. This level of security is a significant advantage over traditional contactless cards, where a lost or stolen card could be used by someone else.

Looking ahead, the NFC Forum is exploring ways to expand the use of NFC technology beyond payments. McCamon mentioned access control and sustainability as key areas of focus. For instance, NFC could be used to unlock doors, whether it’s a car, a residence, or a commercial property, replacing traditional key cards and fobs.

Sustainability is another emerging area where NFC could play a crucial role. The European Union is set to mandate digital product passports, which will require products to provide information on their recyclability, repairability, and materials used. McCamon shared that the NFC Forum is working on enabling products with NFC to include this information, making it easily accessible through a simple tap of a mobile device.

The future of contactless payments and NFC technology is bright, with ongoing advancements in security and usability. As McCamon summarised: "All the pieces are in place; it’s just a matter of user familiarity and comfort."

To hear more about the research and much more, you can listen to Electronic Specifier’s interview with Mike McCamon on Spotify or Apple podcasts.