A report in the Wall Street Journal says 7-11, Wal-Mart, Target and Sunoco are joining a new electronic payments network to compete with similar services from Google and others. Merchants anticipate wide adoption smartphones using NFC (Near Field Communications) for payments.
The new system is part of a broad anticipation in the industry that customers will adopt smartphones enabled with NFC, or Near Field Communications, for retail payments. NFC use is in its infancy and other forms of electronic communication are more common, but investments in NFC systems are large and growing.
With NFC, users need only hold the phone in close proximity to a reader at the point of sale. The common instruction is to "tap" the phone to the reader, but the tap is technically irrelevant and done only to get the NFC antenna in the smartphone within a few centimeters of the reader.
The article cites a report from Gartner Inc. saying that "[m]obile-payment transactions are expected to surge to an estimated $600 billion world-wide by 2016, up from $172 billion this year."
The merchants named in the article are 7-11, Wal-Mart, Target, and Sunoco. The four are joining a new consortium called Merchant Customer Exchange, or MCX, a payments network still being formed. A CEO search is underway and a launch date has not been set.
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