Pointing to how near field communication mobile payments continue to grow, Toys “R” Us recently reported that it has seen 23,000 individual transactions in the first three month since becoming an Isis merchant.

 An executive at Toys “R” Us who spoke at last week’s 2014 NFC Solutions Summit in Austin, said the retail chain is very happy with Isis and that now is the time to focus on the consumer experience for mobile payments so that consumers feel these payments are better than the options they currently have. While NFC has been slow to catch on, a focus of the event was how adoption is getting a boost from new complementary technologies such as Host Card Emulation and Bluetooth Low Energy as well as from non-payments applications.

“Mobile commerce is, in fact, our most rapidly growing channel,” said Alyssa Peera, corporate communications at Toys “R” Us, Wayne, NJ.

“Over the past few years, we have implemented several advancements in our mobile technology capabilities, including launches and updates to our dedicated Toys“R”Us and Babies“R”Us apps for iPhone, iPad and Android. In addition, we continue to work with our partners in the space to offer our customers all the latest technologies, including mobile payment options such as PayPal and Isis Wallet,” she said.

Non-payment applications
While the Isis Mobile Wallet is seeing 20,000 wallet activations per day and is currently enabled on 68 devices, a big focus of the conference was on NFC’s non-payment applications and how these have the potential to stimulate broad adoption.

There are a growing number of NFC applications that are taking off by enabling the Internet of Things, including for wearables, appliances and speakers.

Specific examples include wearable baby monitors, cars that can send alerts for services and smart thermostats that allow temperatures to be adjusted on the go.

An AT&T executive said the company is focused on NFC opportunities beyond payments, including transit and physical access applications. For example, AT&T is currently working along with Blackboard on NFC pilots at Quinnipiac and Tulane Universities, giving students access to education, resources, facilities and funds. The pilot program is expected to be expanded this fall.

“One key takeaway from the Summit was that seemingly disparate initiatives around HCE, Bluetooth Low Energy and the migration to EMV are actually highly complementary of each other and will help advance the pickup of NFC for both payment and non-payment applications,” said Randy Vanderhoof, executive director at the Smart Card Alliance.

“The other takeaway was that the industry needs to figure out ways to simplify NFC implementations for applications providers and developers that are interested in the technology,” he said. “Today, the NFC ecosystem involves a lot of participants and costs that have proven to be a limiting factor for scalability and growth.

“As such, the market needs to find ways to make implementing NFC solutions less complicated for early adopters.”

The 2014 NFC Solutions Summit was presented by the Smart Card Alliance in partnership with the NFC Forum and the NFC World Congress.

Complementary technologies
The growth of several complementary technologies is also helping to spur NFC adoption.

One such complementary development is Host Card Emulation, which provides for a way to create an NFC wallet that does not need to integrate the mobile device’s secure element, making it quick and easy for financial services organizations, retailers and others to deploy NFC payments and make them widely available.

The secure element in a device is controlled by wireless carriers, who have raised some questions about the security of HCE. In particular, because HCE is cloud-based it potentially opens the door to hackers.

Companies interested in NFC payments are looking for ways to add levels of security to HCE.

NFC density
Bluetooth Low Energy is another technology that is complementary to NFC. By enabling marketers to communicate with consumers’ mobile devices at the hyperlocal level, BLE is quickly gaining steam for in-store marketing and gamification.

It is also being considered as a payments mechanism.

A PayPal executive predicted there will be reasonable NFC density from a merchant perspective by 2015 as retailers continue to roll out the EMV contactless payment terminals necessary for NFC-enabled contactless payments using the secure element in a phone.

 “A prominent challenge facing broader NFC adoption in the U.S. is on the consumer side for both general education and education about security,” Mr. Vanderhoof said. “Though NFC is being included as a standard functionality in many mobile phones, mostly Androids, allowing consumers to conduct mobile payment transactions, access digital content and connect electronic devices, many consumers today don’t have a lot of awareness of NFC and these capabilities.

“Mobile wallet providers should focus largely on educating consumers about using their phone to make NFC transactions as well as the benefits they provide,” he said. “Consumers also cite security as another major reason for not adopting mobile wallets.

“Mobile wallet providers need to ensure they are providing appropriate levels of security to protect their customers’ information. They must also communicate to consumers what security features they have implemented and how it protects their sensitive data.”

Final Take
Chantal Tode is associate editor on Mobile Commerce Daily, New York