Microsoft’s newest smartphone device will come equipped with the tech giant’s own version of the most hyped technology in payments: Windows Phone 8 has an NFC-enabled digital wallet.
By utilizing NFC, the Windows Phone 8 wallet will be able to complete contactless payments. And Microsoft has added other NFC-powered features as well, including the ability to pull information from NFC-enabled business cards, or from special advertisements such as those run by Lexus in Wired earlier this year.
The wallet is also said to utilize “secure SIM” technology, in a way that’s similar to what Apple is using for Passbook. Windows Phone 8’s SIM component will be able to securely store memberships, loyalty accounts, deal offers and personal information on the device, Mashable confirms.
Despite its apparent features, however, not everyone is impressed. At the very least, Microsoft’s timing appears to be completely off, argues MPD founder David Evans.
“Microsoft’s introduction of an NFC phone comes at a rather embarrassing time,” Evans says. “There is an emerging consensus that after all these years of trying to get NFC off the ground that it is getting hardly any traction outside a handful of discrete applications like public transit. While it is too soon to write its obituary it will take some big to breathe life into this. An NFC solution from a back-in-the-pack mobile OS provider is simply irrelevant to the marketplace.”
And then there’s ignition. Microsoft says it has at least one mobile carrier partnership in place — with Orange France. An agreement with Isis could happen in 2013. But consumer adoption of Windows smartphones remains low.
“Microsoft had a 4 percent share of the smartphone market in April — down 0.4 percentage points from January, according to comScore,” Evans points out. “Even if Windows 8 is a runaway success that share isn’t likely to increase rapidly enough to a figure that could possibly move decisions on the part of merchants to install NFC-capable POS equipment or invest in training their clerks to take NFC-enabled payments.”
Without consumers, there’s little incentive for developers to create innovative applications for Microsoft’s wallet platform, limiting Windows Phone 8’s use at the point of sale. Says Evans: “Microsoft’s announcement won’t move the investment needle at merchants. The same considerations apply to Microsoft’s mobile wallet. Presumably this functionality is made available to app developers. But no sensible app developer would waste their time working with the Microsoft wallet because there would be virtually no chance that merchants would go to the trouble of accepting payments using that wallet.”
“Microsoft might have a play in NFC or wallets once it vaults ahead of Apple and Android and has millions of consumers hot to wave their phones and wallets. For now it should probably conserve scarce programming time for adding features that don’t depend on hundreds of thousands of businesses spending money and changing business processors,” he adds.
Evans’ ultimate conclusion is one of near confoudment: “Microsoft’s decision to invest in NFC and a wallet for its mobile phone software must result either from its engineers having way too much time on their hands or profound delusion on what it takes to ignite a platform,” he says.
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