Here is a brilliant and funny post on the main barrier to NFC penetration by the founder of Vivotech :

“Yesterday I spoke with a VC kicking the tires about where we are, what traction do we have, what patents, etc. The most interesting part of the discussion is around PayPass and NFC from Companies like ViVOtech’s readers and VISA wallets. It appears lots of VCs are looking at NFC and asking themselves ‘How long is the tail from here to success”. Invariably when I describe to the VC that I founded ViVOtech then teh conversation gets very interesting.

I try to explain the challenges I had in the early days of NFC to bring nine parties together: VISA, Nokia, Chase, Cingular at the time now AT&T, Philips Arena as the merchant, the consumer, ViVOtech, card processor, POS vendor just to do a darn trial of a few dozen consumers. Now any of you in sales know the difficulties of closing a deal with one buyer, imagine requiring nine buyers to say yes before the sale can close. Now that’s talent because I actually did it and now NFC has expanded into guess what? More trials.

The reason we are stuck in trials for NFC is pretty clear and important from a funding perspective. This is because the nine buyer challenge has not disappeared. In addition one other challenge has surfaced. Who owns the consumer? If you are the wireless operator you own the consumer. If you are Visa you own the consumer. If you are Nokia you think you own the consumer. So how do you solve the puzzle to move NFC forward when none of these three global brands are willing and frankly don’t need to give up cntrol of the consumer.

Imagine if you are the wireless operator why would you allow anyone to control yor network for their benefit? If you are Visa why would you allow a new wallet share war to emerge when you won the last one and you now control consumers’ wallets globally. This is as if every consumer’s wallet is like a Malibu beach front property and Visa owns all of it. May be not all of it but 75% and MasterCard and American Express settle for the remaining bits and pieces. The very nature of enabling the NFC .. phones without controlling the consumer would in essence transfer for free the Malibu Beach front property to the wireless operators. Now when was the last time you saw Visa make such a blunder?

So here we are nearly six years since I started ViVOtech in my east wing of my Los Altos Hills house, hired Mohammad Khan to join as a founding partner and managed to move the needle forward but not to critical mass because the players have an inherent conflict of interest to help each other!

By this time the VC often, as it did yesterday, asks me so why are you still in the mobile payment market with Mobibucks? Well because Mobibucks is the only solution that reduces from nine buyers having to say yes to a single buyer–the merchant. Finally it does not require a that Visa give up Malibu property, does not take over the wireless operator decision making, it simply begins the road to mobile payment and cashless transactions at baby steps as it gathers momentum towards the goal of providing a choice to consumers.

So for those of you drinking your on cool aid about NFC, thank me, but reality must sink in that a conflict of interest exists between the wireless operator and Visa’s business model that is not likely to be resolved any time soon!”

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