Is Dorsey’s Knock on NFC on Target?

Is NFC the panacea some make it out to be?

The thought of wave-and-pay and on-the-fly retail rewards seems like something out of “Total Recall” — but without the “I’ll be back” accent.

However, Jack Dorsey, the founder of Square, as well co-founder of Twitter, has highlighted another limitation to NFC that, while surmountable, deserves mention.

Dorsey thinks of the receipt as a publishing medium (kind of like Twitter). “It is a communication medium between the business and the consumer,” he says. But normally it is something we throw away. That communication between merchant and payer is where the “exchange of value” lies. Payments is just something “we need to do” to create that communication.

Dorsey maintains that NFC cannot foster such communication.

Taking a swipe at NFC payments, he notes that they lack that communication layer. “NFC only gives the merchant the identity [of the consumer] after the transaction.” By identifying the customer when they walk in the door, as Square is trying to do with its new Card Case product, there is better chance to build loyalty by doing something for the customer before they even pay.

Now, I am not sure that NFC “only” gives the merchant the customer’s identity; NFC could do more than that. But I find this notion that a receipt is the communication channel between retailer and customer intriguing. In many ways, he is right. When you think about it, the receipt — digital or otherwise — is the “echo” of the transaction, and can be much more than just the verification that Good X was purchased by Customer Y. Certainly, with payment providers facilitating that “communication,” there are opportunities to create more innovative interactions that center on this “communication.” And, I would maintain, NFC can be a part of that, too.