NFC, or Near Field Communications, was introduced to the Android platform in mid-December 2010 as it was included into the Samsung-built Google Nexus S. NFC is a short ranged radio communication standard ostensibly designed for short range communication. NFC can be used to send and receive data across a distance of a couple of inches, or it will use another technology on the device to facilitate a data transfer (typically Bluetooth). It may be used as a simple means to pair devices for a Bluetooth or Wi-Fi connection, rather than using PIN codes, and it also has another important use: mobile contactless payment. Unfortunately, the Nexus S was most definitely ahead of its time when it came to NFC technology as there have been very few examples of mobile payment systems until the last few years, after Apple "invented" the technology with Apple Pay. We have seen some manufacturers drop the technology from their handsets, such as OnePlus in the Two, citing that it simply wasn't being used for much.
This is slowly changing: we have seen Apple's locked down implementation of NFC and Google's Android Pay, which when made available will allow contactless mobile payments straight from our smartphone, smartwatch or other device. Both Apple and Google are busy rolling out their mobile payment standards across the world (Apple announced Apple Pay is coming to China yesterday) and yesterday evening, IHS Analyst, Kevin Wang, explained that the Chinese technology giants are also working on their own mobile payment systems – we may see Huawei Pay, Xiaomi Pay and ZTE Pay joining Android Pay in due course. Of course, these Chinese businesses are keeping quiet about the prospect of releasing mobile payment systems but there are some significant clues to this: Xiaomi have bought back NFC for the Mi 5 smartphone, having removed NFC from the Mi 4 back in 2014 explaining that there were too few users of the technology to make it worthwhile.
Building a mobile payment system is no small order as there are significant security hurdles that must be overcome, deals to be inked with local financial institutions, but it could be a potentially very rewarding business venture as the host hardware company takes a share of all revenue send through the payment system. China may soon have five big-name mobile payment options (the fifth is Samsung Pay), giving customers a wider choice. It remains to be seen if, for example, Xiaomi Pay is tied down to Xiaomi hardware or if it will be made available on other devices. We will also need to see if any of the Chinese mobile payment options will be released elsewhere around the world.