Can NFC Proximity Cards Be Utilized to Pay for Goods Virtually?

If you were to have customers sign up for an account and then transfer funds into that account, you could issue each user a card with an embedded radio frequency identification transponder employing the Near Field Communication (NFC) protocol. Each card could contain a random serial number linked to that user's account. When the customer paid his or her account, the application would determine the account associated with that particular NFC serial number and debit the purchase amount.

The challenge would be that retailers would require a point-of-sale (POS) device able to read an NFC transponder. A number of credit-card companies currently offer credit and debit cards with embedded RFID transponders, and there are POS terminals that can read these cards. But you would need to obtain permission from the financial institutions providing those terminals in order to enable consumers to use them, and it is unlikely that they would offer that to competitors.

Another alternative would be to provide retailers with a dedicated terminal for your institution. That, however, would be an expensive proposition. What's more, retailers might not want to put another terminal on their checkout counter, unless a sizable portion of their customers wanted to use your system.