Why all the fuss over NFC?

Updated 30 Jan 2011: Added Wikipedia link and rewritten certain points 

I'm still not sure what's all the fuss over NFC. Everyone wants to incorporate this technology into their handphones so that payment using the mobile phone can be a reality. But the fact is that payment "using your mobile phone" is already a reality, as long as your handphone is bigger than your contactless payment card.

The solution is very simple, and yet gives flexibility to consumers. Handphone covers.

As long as your handphone cover is big enough, what is stopping you from buying a cover that allows you to slip in an Ez-link card for example. Just by using a simple handphone cover, you will be able to go out, take the public transport to MacDonald and pay for your meal, just with a handphone.

The problems that will come with NFC will be the same as the problems plaguing the current contactless payment technology. Although NFC is based on a standard, for some reasons or another, I still see different readers for different types of contactless payment. If the NFC is embedded within the handphone, that would only mean that the handphone may only work with certain stores that are compatible with that specific provider within your handphone.

The whole point of embedding the NFC chip within the handphone is to realise the dream where consumers will only need to carry their handphones out to do their shopping and payment. However, the issue is that when it reaches the banks and providers, they will find some way to make it fragmented. Look at the example of credit cards. Do you notice that sometimes the cashier chooses a certain reader to swipe your credit card? The reason is due to the rebate points that are tied to the cards.

Therefore, the solution is actually quite simple. Get a handphone cover that will allow you to slip in your contactless payment card. That's it. All in one phone. :)