More Mobile Payment Technologies, More Problems

Alternatives to Near Field Communication (NFC) point of sales platforms are becoming fiercely competitive.

Clinkle, a San Francisco-based startup, and NearBytes, a Brazilian startup, both employ high-frequency sound waves to transmit small amounts of data between devices; repurposing old tech for a new purpose. PayPal and Apple are both utilizing a new kind of Bluetooth in their new mobile payments platforms. What makes the technology behind these options more appealing than NFC? They don’t require additional hardware.

The Bluetooth Low-Energy technology that PayPal and Apple utilize is a wireless signal emitted via Bluetooth that is capable of sending data to smartphones equipped with the proper software. A store could have BLE transmitters set up in their entrance so customers can “check-in” and receive promotional coupons or marketing. The technology, of course, also allows for mobile payments upon checkout.

Alongside Apple’s iBeacon is the revamped Google Wallet, which is stripped of its former NFC requirements, and enables peer-to-peer payments via Gmail accounts.

Clinkle has been attracting attention as an enigma in the startup scene. Developed by a group of Stanford grads, the platform is being introduced to select colleges and universities next year before being released to the general public. It’s being hyped up as the next big social payments platform, and its recently released promotional video demonstrates Clinkle’s usage which seems to involve data transfer through sound.

Similarly, NearBytes transfers data through sound at a rate of around 100 kbps, just 25% of the maximum data transfer rates of NFC. So while it touts availability for most smartphones on the market, the short distance required for data transfers and the slow transfer rate do set some limitations on its potential scope.

NFC has been losing momentum in part because it requires phones to be equipped with an NFC chip–—most smartphones today still aren’t equipped with them, though they are gradually becoming a more widespread technology. The fact that Apple, which recently released its new iPhone 5c and 5s did not stuff NFC in their phones, means that they have little or no faith in the technology.

While NFC is presently at the greatest disadvantage because of the extra hardware required for the user and for the merchant, the increasingly competitive market will still be difficult for any set of mobile payments platforms to gain the lead.