Amazon Vies For The NFC Pie And The Cloud Begins To Form
Monday, April 04, 2022 4:00 PM

Amazon, the world’s largest online retailer according to reports, is venturing into Near Field Communication’s (NFC) space. For the uninitiated, NFC operates in the realm which consists of shortwave communication technology that enables handheld devices to make and receive payments. A chip embedded within the hand held device, typically a smartphone makes this possible in a secured manner.

The Mobile Payment Space

Apple, Google, and Microsoft, who are the leaders in the mobile communications and technology space, are already working on their own models to establish their presence in the mobile payment space. Amazon, which barring Kindle – the eBook reader, has nothing to offer in the name of this technological domain; they are seemingly behind the curve.

Not Just the Transaction

Consider this, the IT research firm Gartner estimates that mobile payments in the year 2014 will touch $245 billion. Even if the facilitator receives a 2 to 3% commission for each payment, it translates into a $7.35 billion in revenue. But the game plan Amazon has in mind seems to be entirely different. Bloomberg, which broke the story, states that Amazon will allow users to purchase items from stores by using NFC as their mobile payment method or purveyor. Naturally, apart from the facilitator commission (like PayPal), Amazon will also be making profits on the goods sold.

A Long Shot

Do not be surprised if Amazon retail stores start popping up in every nook and corner of the country; not unlike what Microsoft is beginning to do and as Apple has already become a tech retailing giant. But that is a distant possibility since Amazon’s business model and core competency do not bode well with brick and mortar stores; they are proven quite adept and blowing up the virtual arena in terms of sales and products moved though.

The Cloud

The news of Amazon's NFC foray was made public on the backdrop of its launch of the Amazon Cloud, an online digital storage service which enables users of the service to store digital files online and access them from anywhere with Internet connectivity. Though the service is not new, pertaining to the Amazon Cloud Player, a service offered as part of Amazon Cloud, will allow users to stream their music from anywhere. Amazon plans to charge users $20 per year for a storage space of 5 GB.

A Single Copy

This would mean that Amazon soon will be shopping for storage servers to meet its data storage demands. Tech gurus however are of the opinion that rather than storing each and every song for each user, the company would be storing only a single copy of the song which multiple users might have uploaded. This would enable the company to save space by getting rid of duplicate entries. Copyright issues however might crop-up as there is not any way for Amazon to know whether the uploaded song or music right is a legal copy or a pirated one. The moment Amazon delves into Digital Rights Management, it either will have to hire a third party for managing this business spectrum or fabricate its own format (which is already overcrowded) to implement this idea.

New Bridges to Cross

In short term, though Amazon might be spending a lot on developing these new tech avenues and concepts, it can pave the way for a bright future. With competition from the likes of Apple, Google, and Microsoft, they better do something.