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Consumers who visit premier Hoyts-operated cinemas in Australia can pay for items while in their seats by scanning a mobile bar code. Each seat in the theater has a mobile bar code placed on the arm rest. To pay for an item, users open the app on their phones and scan the QR code. They can then select food and drink items to buy and have it sent to them at their seats. Moviegoers can also enter a six-digit code located above the mobile bar code to activate the app or tap a NFC-enabled smartphone over the arm rest to pay. Users who pay via the QkR app must link their MasterCard accounts by entering their information into the app.

The new NFC initiative is part of MasterCard Lab’s work that is focusing on ramping up the company’s work with mobile payments.

“Australian consumers are renowned for their love of innovation technologies, which is why MasterCard selected this market for the pilot,” Mr. Barr said.

Payment war With similar mobile wallet initiatives from Google and PayPal, the mobile payment space is expected to heat up in 2012.

However, MasterCard is playing a unique card in mobile payments by bringing mobile bar codes and apps into play.

PayPal’s new mobile point-of-sale solution is also slated to gain traction this year with big box retailers Home Depot and Office Depot rolling it out to stores (see story).

One of the challenges technologies such as Google Wallet have struggled with is that it is only available on Sprint Nexus S 4G mobile phones, which leaves out a majority of the mobile phone industry.

Since the QkR app is available on iPhone and Android devices, the app hits a majority of the smartphone market.

MasterCard is running an NFC pilot program at movie theaters in Australia that lets consumers pay for food and drink items via their mobile devices.

For MasterCard, one of the biggest hurdles will be educating both consumers and companies about the technology, but the initiative is proof that the payment company is placing big bets on mobile payments.

“MasterCard is consistently striving to deliver the next generation in payments,” Mr. Barr said. “Specifically in this pilot, mobile payments and making life easier by enhancing the in cinema experience,” he said.

One blogger from tech site Mashable found this week that Google's Ad Preferences page assume that she was middle-aged - and a man, simply because her interests included technology and computing.  The profile page, called Ad Preferences, is hidden away inside a settings menu in Google Accounts, but can be accessed directly here. This sort of in-depth profiling raises alarm bells with privacy activists. 'Consumers have increasingly digital lives and they are developing an unfathomably large data trail every day,' says Rainey Reitman, activism director for privacy group Electronic Frontier Foundation. 'There has never been another time in history where privacy was under the kind of assault it is today.'You can opt out of the tracking, or manually edit your details. Google also  does not store information on controversial subjects such as pornography. The Ad preferences page came to public attention following a sweeping change to 'privacy policy' which comes into effect on March 1, although the preferences page was launched some time ago. YouTube data, Gmail information and search data will all be used to build up ever more accurate advertising profiles and also the company claims it will make searches more personalised.

Of course, some aren’t so bullish on NFC, notably eBay (who owns PayPal) CEO John Donohoe, who in a recent earnings call said merchants refer NFC “not for commerce.” And odd statement considering PayPal just dipped its toes in the NFC pool with support for Android.

Gajda tells is, “I think for some people NFC will replace the actual physical credit card but it will be a long time before NFC replaces all payments.” He believes that we are going to start seeing more traction by end of this year but says the capability of “taking credit cards and putting them on mobile phones will represent the long tail” in payments. But he adds, “the pieces are in place for NFC to take off.”

The second part of the Visa’s mobile strategy involves the digital wallet and the mobile web. Gajda says that as e-commerce ramps up on mobile phones, there is a need for one-click, simple username and password checkout experience in a transaction being made on a mobile device. That’s an area where PayPal has been working hard to dominate in but Visa sees room for other players. Should we expect a PayPal-like, one-click mobile payments technology coming from Visa soon? Perhaps, the company hasn’t been afraid to enter PayPal’s territory in the past, launching a peer to peer payments service earlier this year.

Gajda tells us that the biggest challenge of mobile payments in the current market the massive amount of fragmentation in the mobile industry. He explains that with all of the various mobile operating systems, specific manufactured phones, applications and more, keeping up with pace of innovation on the development side is a major challenge for Visa.

Visa actually tested a partnership with retailer The Gap earlier this year which alerted customers via SMS of discounts in stores near them. Gajda tells us Visa is working with a number of other retailers and banks on similar deals which will be announced soon.

Gajda says there are a number of other factors at play in the mobile payments place that need to be highlighted when talking about mobile payments. International is a huge growth area in mobile payments. He tells is that outside the U.S., there are a large number of people who have mobile phones but don’t have banking relationship or credit card. In fact, he says there are 2 billion people in world that have phone, but don’t have a bank account or credit card.

In these markets, Visa’s goal is to bring prepaid accounts, purchasing power and other financial services to basic phones. These could include topping up a mobile phone with airtime, buying transit tickets, peer to peer payments. And this goal was the mean reason behind the purchase of behind the $110 million purchase of Fundamo. The company’s platform delivers mobile financial services to unbanked and under-banked consumers around the world, including person-to-person payments, airtime top-up, bill payment and branchless banking services.

MOBILE Gajda explains that there are three prongs to Visa’s mobile payments strategy. One of these is NFC, and focuses on payments using a mobile phone at a physical store. For background, NFC (near field communications) enables people to make transactions, exchange digital content and connect electronic devices with a simple touch. As we’ve seen with Google Wallet, Android phones such as the Nexus S are being built with NFC chips, making your cell phone a mobile wallet. Visa recently joined the ISIS network, a NFC mobile payment network that is a joint venture formed by AT&T, T-Mobile and Verizon. ISIS will soon launch in a number of markets, including Utah and Texas.

Connecting with the small business world that don’t yet use credit cards or are new to the system is another area where Visa feels there is strong potential, especially with mobile payments. That’s why the company invested in disruptive mobile payments company Square and took an advisory role in the company. Gajda says that the power of Square is that it is enabling small businesses and independent workers such as doctors, designer and other merchants to start using credit cards and grow their businesses. It would make sense for Square and Visa would somehow work to harness the power of their partnership (As of April roughly two-thirds of transactions using Square’s payments service were through Visa credit cards.), but it’s unclear what the two companies will reveal any new co-produced products soon.

Schulz explains that the idea behind the wallet is that consumers want control over their wallet and want to have payment information and access available to them at all times. She believes that the digital wallet will click to buy incorporated on retailers’ sites is essential to the future of e-commerce in both the U.S. and emerging markets.

DIGITAL Visa’s digital payments guru Schulz outlined her strategy for digital payments at the company, which centralizes around the creation of the digital wallet. Schulz says that because of the fact that e-commerce is being more easy and convenient with customers, especially with m-commerce, the underlying payments infrastructure has to evolve.

And Visa’s answer to this is a new digital wallet initiative. Here’s how it works. Users will have an account, and they can add their credit card numbers (and cards from other credit card companies such as American Express and Mastercard). Visa is partnering with a number of financial institutions to offer this product to their customers.

Users can also load their loyalty points and rewards cards, as well as organize their shopping lists. Schulz describes it as a “wallet in the cloud.” But she says the key to the success of the wallet is a seamless, one-click payments experience for the consumers. So Visa has partnered with a number of large-scale retailers (which will be announced soon) to integrate what Schulz refers to as a ‘new acceptance mark’ on a merchant payments page.

So there will be a button you can click on, which will prompt you to sign-on and then will sync your digital wallet with the purchase in your shopping cart. So for example, imagine you had a camera in your cart, and Visa offered a 20 percent off at camera’s purchased at BestBuy, the wallet would sync and show the discount in your cart. The same works for loyalty points and more.

Visa competitor American Express is also working hard to innovate both at the large retailer level, as well as among smaller retailers, with GoSocial.

She compares the digital wallet offering to “two-hand clapping.” ” You can have a digital wallet,” Schulz explains, “but you need a merchant solution of click to buy, and Visa’s going to transform that experience.” And Schulz highlights another recent acquisition, Playspan, has helping drive a simplified commerce experience, a.k.a. click to buy, within game or within app.

Of course adding another checkout experience to online retailers’ sites can be a complicated and time-consuming process. But that’s where Visa’s $2 billion acquisition of CyberSource comes in. CyberSource is said to process about 25 percent of all e-commerce dollars transacted in the United States, and operates e-commerce for hundreds of thousands of retailers. Schulz says this relationship has helped speed up the pace of implementation.

Creating the digital wallet, both on the mobile and web platforms, is no easy task. Visa has a name for itself in the credit card industry but the fact is that the brand still has to attach innovation to itself in order for people to take these products seriously. Perhaps that’s one of the reasons why Google’s Mobile Wallet news created waves, even though NFC technology is in its early stages.

But he says that there is still so much room for innovation around how we pay with mobile phones. “With the rise of smartphone usage, we are already seeing a lot of innovation around commerce,” he explains. “It’s inevitable that this will extend to the payments around the sales in mobile commerce.”

While Visa, American Express and others are looking to capitalize on the changes taking place in the payments industry, it is a challenging effort. Local commerce is a big part of this, and everyone is trying to find a way to close the redemption loop. But e-commerce, amongst larger retailers, is also a multi-billion dollar market that Visa hopes to continue to play in with products like a digital wallet. And in-store payments, whether that be through NFC, Square or others, represent another market.

I’ve been talking to a number of executives of payments companies and founders of innovative payments startups, and while their objectives are different, they all seem to agree on one thing. It’s early and there is still much more innovation were going to see in the next few years in the online and mobile payments space.

While commercial partnerships are definitely key to the broad appeal of Serve, part of Sanghi’s master plan in furthering Serve’s presence is a connection with developers. “It is difficult for mobile payments startups to scale without partnerships with some of the major financial partners,” he explains. “There are a lot of regulation in terms of moving money, and fraud management and we want to be the partner mobile payments startups think of in this space.” Sanghi says that in first half of next year, American Express will open up the Serve platform to developer community.

Another area where American Express is focusing its efforts when it comes to Serve is on data. “Data is going to be a differentiating factor in the payments space,” Sanghi explains. A personalized experience is going to be key in providing the digital wallet that consumers flock to, he says. And it’s not just purchasing data that American Express is looking to mine.

Intent data, structured data and unstructured data will all play a part of delivering a personalized payments experience. That means analyzing things such as Tweets, Twitter sentiment, your social graph, Facebook updates and more to deliver targeted offers. “The magic is going to be in marrying structured data and unstructured data for results in real-time,” Sanghi says.

With 100 million card members, American Express’ data opportunities are massive. But privacy is a key concern in this data mining, says Sanghi, and the company has to be sure they aren’t abusing these issues, especially as it relates to financial information. For example, the company’s Facebook partnership, in which AmEx cardholders can link their cards to their Facebook accounts to receive deals, is an opt-in experience.

Across the board, American Express is going to be announcing many more commercial partnerships including those with gaming and telecommunications companies. Serve will also soon enter new geographies, says Sanghi, which will also be a key part of the platform’s growth in the next year.

Of course, American Express has competition in the digital wallets space, and companies like PayPal and even Google are also looking to compete. And fellow credit card companies such as Visa have major ambitions to dominate the digital wallet. Regardless, all of these companies need to fine-tune their offerings so that the benefit to consumers is clear. The battle to become the de facto digital wallet is just starting, and which payments provider that will create the technology that keeps consumers engaged has yet to be determined.

Privately-held, Cape Town, South Africa-based Fundamo says it boasts more than 50 active mobile financial services deployments across more than 40 countries, including 27 countries in Africa, Asia and the Middle East.

The combined Visa Fundamo platform will add enhanced functionality and new services to existing mobile financial services subscribers for globally accepted payments solutions.

Fundamo’s platform enables the delivery of mobile financial services to unbanked and under-banked consumers around the world, including person-to-person payments, airtime top-up, bill payment and branchless banking services.

Fundamo’s deployments currently have a base of more than five million registered subscribers and the potential to reach more than 180 million consumers with mobile financial services.

Fundamo CEO Hannes van Rensburg and the executive team will continue to manage current and future Fundamo implementations as members of Visa’s mobile product organization.

Monitise and Visa, meanwhile, say they will debut a mobile banking solution in the U.S. for clients of Visa DPS, the company’s debit and prepaid processing platform.

Offline payments The test is running for five days, during which time anyone who downloads the app from the Android store or Apple store in Sweden and enters their PayPal credentials can receive an NFC sticker when they arrive at one of the two stores so they can tap to pay for items in the store.

“Our wallet lives in the cloud and not on devices. There are plenty of ways to access your wallet in the cloud and NFC could be a great way to do that.”

“We think it is a very interesting technology and we are looking at ways to use it,” he said. “It is one of the technologies that we are looking at – we are not betting the bank on NFC.

PayPal parent company eBay has not been a big supporter of NFC – or near-field communications – technology. However, as a leader in the alternative payments space, it makes sense that PayPal would want to investigate NFC.

“While eBay maybe hasn’t been a big proponent, PayPal has been quite vocal about the opportunity,” said Drew Sievers, CEO of mFoundry, Larkspur, CA. “PayPal is the biggest jewel in the eBay empire, so their vision is, in my opinion, the most interesting driver for eBay corporate.

“PayPal’s publicly stated goal is to become as important a payment option offline as it is online,” he said. “NFC is a potentially disruptive technology that could offer fertile ground for PayPal’s offline payments endeavors.”

NFC has been embraced by numerous companies such as Google, Isis – which is a partnership of AT&T, Verizon and T-Mobile – and others. However, there are significant challenges facing these companies’ efforts to expand NFC as there are still a limited number of mobile phones available that support NFC.

However, PayPal – as an alternative payment solution – also faces the challenge of getting retailers to accept PayPal payments if it were to try for a broader NFC roll out.

“PayPal faces the same challenges with NFC as everyone else in the ecosystem: NFC-enabled phone penetration combined with merchant acceptance penetration,” Mr. Sievers said.

“In fact, they face an additional challenge since nearly every existing NFC-enabled merchant takes Visa, MC, Amex, and Discover, but those same points of sale don’t take PayPal yet,” he said.

“So PayPal has two things to sell: NFC acceptance and PayPal acceptance. That’s a tough sell.”

Long-term strategy While the NFC test is limited, it is another example of how PayPal is trying to bring its technology to bricks-and-mortar retailers. PayPal wants to get merchants to use PayPal and is looking for ways to embed PayPal in the shopping experience via applications, deals and a variety of other merchant services.

“EBay is recognizing that NFC is one of those things that would enable them to grow more in a physical retail environment rather than providing online or electronic transactions,” said John Devlin, London-based group director of AutoID and Smart Cards at ABI Research.

However, it is likely to be some time before PayPal would be able to deploy an NFC solution on any kind of scale. “This is something that they are thinking about on a medium to long-term basis,” Mr. Devlin said.

“In the next couple of years, NFC is really going to be used at the local or national market level rather than an international basis,” he said. “Once it becomes more widely available, that is when PayPal would be more actively interested in pushing ahead.

The sticker model of NFC – where an NFC sticker is placed on a mobile device to make it compatible with an NFC reader – is more of a limited solution.

“It is not able to plug into the handset and take advantage of all of the different smartphone functionality,” Mr. Devlin said. “It has advantages in that you can upgrade existing handsets quickly and easily but I don’t think anyone is really pushing ahead with stickers for a long-term consumer solution on a mass market level. This indicates that this is a trial rather than a precursor to a wider deployment.”

Proximity payments PayPal expects to do $3.5 billion in mobile payments this year using its existing payments solutions. The NFC mobile app test is another way that it is experimenting with new payments solutions as proximity payments grow “This is what we’ve always done – experiment and test and be open to partnerships to drive innovation,” Mr. Nayar said. “What we are going to start to see soon is the growth in proximity payments where you need to be in contact with a reader of some sort,” he said. “This can be done with Bluetooth, RFID and NFC is another way to do it.”

he company said it is now on pace to do $3 billion in mobile payments this year though much of that is person-to-person transfers using the PayPal app, which don’t yield much revenue for PayPal. Users do not have to pay a transaction fee when payments pull from bank accounts or an existing PayPal balance.

In many ways, this is similar to personal transfers PayPal has previously enabled through its mobile app using Bump Technologies. Users are able to send money back and forth by bumping their phones together, a solution that doesn’t rely on NFC. It’s unclear how much of that may have happened through bump payments, so I don’t know how significant person-to-person NFC payments will be. It’s nice to be able to make a payment to someone by just touching phones but, again, it’s not like many PayPal users don’t have that ability now.

Shimone Samuel, Product Experience Manager for PayPal Mobile, however, said the NFC solution has fewer steps than bump payments and can be activated even when only one person has launched their widget. Bump payments require both people to have their PayPal mobile app open. He said PayPal turned to NFC because it simplifies P2P payments.

“What I’m looking for is what is simplest and easiest for customers and NFC is the simplest way to request money,” he said.

The bigger opportunity is in enabling real-world payments as retail and local merchants, something PayPal is still set to unveil later this year. That will be a much bigger deal because it will signal how PayPal will counter moves by Google and its NFC payments initiative, as well as other challengers like Square and the carrier consortium, Isis project. Samuel declined to comment on how PayPal will use NFC specifically at point of sale but he said the company takes every opportunity to learn from its products.

PayPal needs to figure out how to tap that market for offline purchases, which is much bigger than than pure online transactions where it’s excelled. So it’s nice that PayPal has enabled some P2P NFC payments, and it’s showing that it’s getting up to speed on NFC. But we’re still waiting to see the real fireworks.

Commissions on those Credits netted Facebook $557 million in revenues in 2011. (Facebook writes in the S-1 that the “other fees” that it designates on the same line as Payments was “immaterial.”)

At this point, Facebook doesn’t take any commission on Credits that are purchased via mobile: that service—which uses the premium SMS channel to send a code to a user to redeem Credits on the main site, and then charges the amount directly to the user’s mobile bill—already has some other parties taking a cut, including the provider (eg Zong or Boku), the mobile carrier and even another processing middleman. Rather, Facebook’s cut comes in the form of a commission on the payments, similar to what Apple (NSDQ: AAPL) takes for transactions on its App Store. That fee is 30 percent.

Could Facebook eventually take more control of its payments, and potentially cut out some of those middle people? Probably not soon, in Court’s opinion. “Zong brought something to Facebook that it didn’t know how to do, and it became very deeply integrated,” he said. “I don’t see them starting to do what Zong does, which is connecting hundreds of operators.” Then again, he added, “When they have a worth of $100 billion with $10 billion on the balance sheet they can do pretty much anything they want.”

What’s interesting is that as Facebook starts to expand some of the other functionality on its mobile platform, that will also open up a lot more opportunities in terms of mobile transactions as well.

As Facebook enables and opens APIs to get publishers to build apps for its mobile platforms (via the web and apps), “Facebook will make sure those are monetized,” he said. “I have no doubt Facebook will be making money on mobile games and other content given the engagement and scale on mobile. There is an amazing opening there.” Paying for Credits that will actually get used on the device itself, he said, will be “even more natural.”

Facebook in the S-1 said it had 425 million monthly active users accessing the social network via mobile devices, with that number outpacing the growth of overall subscribers.

“Credits is a wallet that you can top up in all kinds of ways,” he said. “Facebook has created its own currency and has imposed that on anyone offering digital goods on Facebook.” If anything, that currency might have a life outside the platform, to to buy things outside of Facebook.

But even with the opportunity for Credits, Court doesn’t see this eventually overtaking revenues from whatever advertising Facebook plans to put on its mobile services “for a very simple reason,” which is down to how those games are played today. “If you look at Zynga, only between two and three percent of people who play actually pay. The rest play for free. Tt will be the same for Facebook on mobile, with only a fraction spending money,” he predicted. “With advertising, 100 percent of the population is exposed.”

Even though Facebook has listed “no mobile ads” as one of its risks on the S-1, it could be playing its cards very close to its chest: the last few days has been a lot of speculation already about how soon Facebook will launch those mobile ads.

Razorfish (via Digiday) says that it is already working on a pilot for rich-media ads for the social network.

The blog Inside Facebook, meanwhile, has put its money down on sponsored stories to be the “most likely” first stab at mobile advertising on the site, with running a mobile ad network the second-most likely option. (That’s one that we explored a bit yesterday as well.)

Update: Razorfish’s VP of mobile, Paul Gelb, has made a correction on how his comments were portrayed in the Digiday story (via Twitter): his agency is not working on any mobile ad buying with Facebook. “In the interview I was referring to rich media featured stories, not paid ads,” he said.

A Facebook spokesperson, via email, added the following: “We want to clarify that we are not working with any agency to create paid ads on our mobile platform.”

Much has been made of the mobile risks that Facebook laid out in its S-1 IPO filing earlier this week. Essentially, it’s seeing/pushing massive growth in mobile, but it still hasn’t tried out advertising, its most effective route to revenues, on this platform. That’s not to say it won’t. But meanwhile, there is another area where Facebook is already making money through mobile.

No bank card is needed and the customer is emailed a receipt for the goods.

A blog post from eBay said the system also works using a plastic card issued by PayPal that works like a credit card.

PayPal’s mobile payment system is an interesting experiment, but one that is likely to be overshadowed by NFC technology.

Mobile phone companies and banks are pushing hard to make contactless payments the norm. Last week, Visa certified smartphones from LG, Samsung and RIM as safe to use its NFC payment system.

NFC is far simpler and quicker than PayPal’s system as you simply need to touch your card on the reader without entering any codes.

That said, NFC payments have a limit of £15 to £20 so there is potential for a mobile payment system for more expensive items.

Whether PayPal can take advantage of that market is unclear. Issuing customers who already own a Visa card with an NFC-enabled credit card is a relatively simple operation, but persuading people to fundamentally alter the way people they use PayPal by taking it offline is a much harder sell.

Also, PayPal has 106m active accounts, but there are more than 1bn Visa cardholders worldwide.

PayPal also announced that mobile payment volume reached $4bn in 2011, more than five times the volume in 2010.

Its revenue increase 28% year-on-year, and net total payment volume grew 24% to $33.4bn in Q4 compared to the same period the year before.

eBay achieved revenue of $3.4bn in Q4 2011, a 35% increase on the same period in 2010.

For the full year revenue increased 27% to $11.7bn.

the region’s most connected country as the Informa announcement explains: Nigeria will continue to be Africa’s biggest mobile market by subscriptions, with a forecasted 152.09 million subscriptions at end-2016. Egypt will hold onto its position as Africa’s second-biggest mobile market, with a forecasted 118.03 million subscriptions at end-2016. South Africa, the continent’s third largest mobile market, will have 80.56 million mobile subscriptions at end-2016.

But perhaps most interestingly today, Zypr gives developers natural-language voice control for all services, regardless of provider or category.

Zypr is an ad-supported service and offers developers revenue-sharing opportunities.

The app also includes traditional and social sharing capabilities. You can the send ecards as well as holiday offers from Starbucks, among other things.

The object, says Alexandra Wheeler, vp-global digital marketing for Starbucks, is to “surprise and delight” customers during the holiday season.

Although Starbucks experimented with an AR app years ago in an ad, Wheeler says this is the first major AR push by the company. The effort follows some other recent AR programs from marketers including an app from Nivea featuring Rihanna and an Amazon app that lets you point your phone at objects and then buy them.

Cup Magic, created by Blast Radius, caps off a year of successful mobile implementations by Starbucks. The brand launched a mobile payment app in January that has been used in more than 20 million transactions and a QR code program designed, like Starbucks Cup Magic, to enhance the in-store brand experience.

In order to encourage usage, Wikets doles out points for your recommendations, other in-app activity, and, most importantly, your purchases. (100 points = $1.00 USD). These points can later be redeemed for gift cards from select merchants.

In the app’s main stream, which includes all the recommendations on the service, there’s a search button to find recommendations from others or to find users by name, plus filters for popular recommendations, nearby recommendations and recommended people. As you browse through this stream, discovering new content, you can tap a button to add items to your wishlist or strike up a conversation around the item in question through a comments feature.

A couple of months ago we wrote about a pilot program at Arizona State University gives students NFC-enabled phones that can be used to access dormitories and university buildings. At the time we said that this is the perfect place for the widespread use of NFC to start: universities have long been known to be the birthplace of behavior-changing trends.

Let's look at the NFC Coca Cola machine. This is actually the second time that we have run across one of these prototypes (note: we were not at ad:tech this week but found this story from Mobile Commerce Daily). The first time we saw one of these Coke machines was at a reception around mobile payments from MasterCard in New York City a couple of months ago. It functioned just like any other Coke machine, except it accepted money through NFC. Make your selection and tap on the receiver instead of digging through your pocket for change.

"The combination of mobile commerce and location technology moves our business from the point of sale to the point of thirst," said Wendy Clark, SVP of integrated marketing communications and capabilities Coca Cola according to Mobile Commerce Daily. "We have to place bets and we have to take risks if we want to feel innovation in the way that we market."

We may see groundswell coming from the big brands that are looking to change how they interact with customers. NFC is not going to be adopted because the big corporations like Google make partnerships with other big corporations in the mobile and financial worlds and all of a sudden we are going to change how we go about our day-to-day lives just because they tell us so. The act of buying a Coke is one of the simplest and most straightforward acts in all of society. If you see that your friend just paid for a Coke at a vending machine with her smartphone, you are much more likely to go, "hey, I wonder if I can do that to." Once you have your foot in the door, you are more likely to use that process again.

Adapting Technology To The Situation

During Nokia World in London I met a developer that wanted to explore NFC because his father has Alzheimer's and he wanted to figure out how the technology could help him give his father a way to manage his day-to-day life. For instance, setting timers on items around the house to keep his father from doing odd things at odd moments, like opening cabinets in the kitchen at 4:00 a.m. or leaving the house at the same time and wandering the neighborhood, not knowing where he is going. If his father has a watch with NFC in it, he could program those household functions to only respond to the NFC timer at certain times of the day.

Think of it: this is how NFC will evolve. Consumers are not going to be bludgeoned from on high by companies like Google, Sprint and MasterCard. It will start as a groundswell where developers see a problem, solve a problem. Big brands, like Coca Cola or Wal-Mart, will start instituting NFC solutions and people will become familiar with the technology first. It is one thing for Google to have a big demo, roll out a bunch of partners and say "this is the future." It is another for people to actually have the technology in their hands, using it to do a variety of activities.

Even the Google Wallet competitor, ISIS, thinks that competition is good for the realm. In an interview with CNET, ISIS CEO Michael Abbott said, "competition is what this space needs." Why would he say something like that? Because Abbott understands that people learn from other people and that the more solutions there are out there for people to see the technology in action, the more will ultimately adopt it. Competition drives innovation and better products in consumers' hands. In that way, the technology adapts to the situation, not the situation to the technology.

The screen behind the steering wheel displays your speed and estimated range, and a sort of activity level on the right hand side. It's this widget that has captivated me.

It's designed to give you real-time feedback on your driving style.

When the car is happy (i.e. being driven efficiently), the ball is green and in the center of the gauge.

Stomp on the accelerator, and it rises to the top, changing color to yellow.

Brake too hard (so you're bypassing the kinetic energy recovery) and it dives to the bottom, again changing color to yellow.

The more time you spend in yellow, the fewer miles you'll go before you have to start burning hydrocarbons. 

GM claims you can drive about 35 miles on a full charge, but this is highly dependent on the driver. Depleting the battery won't leave you stuck at the side of the road the way it would in a Tesla or Nissan Leaf—but if you wanted to burn gas, why did you buy a Volt in the first place?

Very quickly I found I'd adapted my driving style. Instead of hustling it around as I would another car, I became more relaxed at the wheel, doing my best to keep the ball green and in the middle.

If anything, the experience was almost like an playing an early video game, except that I was on the streets of Detroit rather than in front of an Atari console. 

And I enjoyed it! It's a really elegant idea from GM, one that very rapidly induced a behavior change from me.

Which is quite impressive, as doctors and public health experts from around the world will tell you, modifying peoples' behavior is a lot easier to say than do.

(Others have reported similar experiences with less game-oriented gauges like the Prius' MPG readout.)

The technology is predicted to generate high revenues, explained Howard Wilcox​, senior analyst at Juniper Research.

"NFC-based services in North America will account for nearly $47bn, or 41 per cent of the total, by 2016. The Far East and China ($31bn or 27 per cent) and Western Europe ($23bn or 20 per cent) will follow," he said.

However, Wilcox warned that there are still significant infrastructure challenges, and institutions including banks and merchants will need to have sufficient point-of-sale readers installed.

The Google Nexus S was the first smartphone to ship with NFC technology, but the hardware has seen limited use in the UK so far.

Google is to start trialling NFC services in US this summer, and O2 is expected to roll out a mobile wallet application in the UK this year.

RIM has also backed the technology, and its forthcoming high-end devices, including the BlackBerry Bold Touch, are expected to ship with NFC.

HTC, meanwhile, has taken a more cautious approach, stating that it will incorporate the technology once there is established demand.

The iPhone 5 was tipped to feature contactless payment, but the latest reports suggest that Apple will omit NFC from its fifth-generation iPhone.

Around 45 million people in the UK use a mobile phone, and 49% of mobile users surveyed use their device to purchase products at least once every three months. But there is still a big demand for in-store purchases too, as we saw with London’s Oxford Street retailers gearing up for Christmas by introducing a number of tech initiatives to help capitalize on the growing m-commerce trend.

PayPal’s findings are based on interviews by Forrester Consulting with 10 senior executives from major UK retailers and other businesses, with a combined turnover of £85bn.

“We’ll see a huge change over the next few years in the way we shop and pay for things”, says Carl Scheible, Managing Director of PayPal UK. “By 2016, you’ll be able to leave your wallet at home and use your mobile as the 21st century digital wallet. Our vision of money is to enable you to pay for something from wherever you are, whatever device you’re on – a PC, mobile phone, tablet, games console and a whole lot more.”

Indeed, Scheible continued by saying that it will take another 4 years before we’ll see the real beginning of money’s digital switchover in the UK, but he stopped short of any discussion relating to a ‘cashless society’. “We’re not saying cash will disappear entirely, but we’ll increasingly use our phones and other devices rather than our wallets to pay in-store as well as online”, he says. “The lines between the online world and high street will soon disappear altogether. Children born today will become the UK’s first ‘cashless generation’. It will be completely natural for them to pay by mobile.”

So the real prediction here is that the uptake of mobile payment technology will increase significantly over the next 4 years – something that most people would probably agree with. But at the rate we’re currently going at, and with the likes of NFC technology gaining momentum in the micro-payment sphere, cash could be under threat sooner than we may otherwise have realized.

By 2016, it’s thought that UK mobile retail sales will hit £2.5bn. PayPal currently has over 14m active UK accounts, over a million of which have been used to send a mobile payment. Around the world, PayPal expects to process more than $3.5bn (£2.25bn) in mobile payments this year, five times more than in 2010.