Nokia smartphones with NFC next year, but banking costs deter retailers

Regardless of the gloom clouding Nokia's financial performance, the company continues to be the leading advocate of NFC and has now committed to integrate the technology into its smartphone portfolio in 2011.

While not detailing which smartphones would include NFC, Anssi Vanjoki, Nokia's vice president for markets, said that the handsets would support the Single Wire Protocol (SWP) and MicroSD security, and probably a Nokia secure module too. However, other sources claim that Nokia has yet to decide which route it will adopt to implement NFC.

This move by Nokia, which has seen the company supporting numerous trials as well as owning extensive IP in NFC, will be seen by some as the company attempting to persuade operators to back the contactless technology. This method of pushing technology into the market was successfully adopted with Bluetooth, GPS and cameras, and Nokia is now hoping it can set the future direction for NFC.

The difference with NFC is the requirement to convince retailers that contactless payments make good business sense, and this remains a problem for many.

UK shopkeepers have recently followed their US counterparts and called for government intervention to force the financial services industry to reduce card processing fees. Currently, retailers claim that debit cards cost four times as much to process as cash transactions, and that any move to replacing cash with contactless cards and NFC phones will leave them out of pocket.

"Retailers are seriously concerned that banks plan to make the higher debit card charging regime the norm for the emerging contactless and mobile phone payment methods," said a spokesman from the British Retailers Consortium. "If that happens, retailers would face huge increases in their costs as these new ways of paying replace cash--particularly for low value purchases."

For more on this story:
- read All About Symbian & The Register

Related stories:
French operators support NFC deployment, nationwide coverage planned
T-Mobile to trial NFC services using SIM for secure storage
Telefonica O2 plans commercial NFC services
Nokia makes play for NFC leadership

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