After pushing NFC as the future of payments, Google Wallet will now provide a plastic, prepaid debit card. The decision is a sign that NFC is being adopted at a slower rate than many anticipated as many consumers feel there is not that much friction involved in the current system of payments after all. That said, Square and Paypal have been instrumental in payments going mobile and recent entrant Coin is trying to connect all your cards to a single one managed via an app. Stay tuned as the payments race continues.
Microsoft has chosen to phase out it’s Tag barcode technology, essentially a more sophisticated QR offering that allows for more data stored in a smaller space. The product that marries the physical and digital has some utility, but the lack of consumer adoption has made it less impactful. In fact, eMarketer reports that approximately 1/4 of smartphone users have ever scanned a QR code and those that do with regularity has to be far less. While NFC looks to supplant QR, it may be running into the same roadblocks.
Bluetooth Low Energy has a lot of potential to change the way our mobile devices interact with the environment around us, and applications of the technology for device tracking are only the tip of the iceberg. Tile, a startup that crowd funded $2.7 million for a Bluetooth Low Energy-based device-tracking chip, was proof of the viability of a concept now being adopted by Nokia for its Lumia phones in the form of a “Treasure Tag.” The Treasure Tag uses a combination of Bluetooth Low Energy and NFC technology used for mobile wallets to track whatever the tag is attached to, like a set of keys, from an app on the phone. The process also works in reverse, allowing the user to press a button on the tag to trigger a sound on the phone, so long as it’s within about 160 feet. Battery life is a concern with these devices, as Treasure Tag only lasts about 6 months (Tile advertises a 12 month lifespan), but the technology could have us all spending a lot less time hunting for our keys.
NFC is a buzzy topic in the ad sphere lately, but its real-world spread has been limited. A British team is aiming to put NFC in (or on) the hands of more people by developing a chipped ring with dual NFC zones to allow geeks, I mean, early adopters, to activate simple NFC-based commands like unlocking their phones or front doors, or share contact information. The ring’s creators envision the ring as having a “public” zone, meant to be worn facing out, and containing contact information or something similar, as well as a “private” zone, worn facing in, containing unlock commands, passwords, or other sensitive data. The invention’s Kickstarter campaign has just met its £30,000 goal with 26 days remaining, so perhaps this early popularity could contribute to NFC’s more widespread adoption in everyday life, as well as in the ad space.
Weve, the UK joint venture from mobile operators Vodafone, EE and O2 is gearing up for a big push behind NFC payments next year.
Their vision is summed up by this quote from the article:
“Weve hopes to have a system whereby mobile users can tap their phone at the till to use a discount offer, a second time to collect the loyalty points, and a third to pay the bill — all of which has been encouraged through advertising sent to the person’s phone or tablet”
Chinese giants China Mobile and UnionPay have joined forces to launch an NFC mobile payments solution in 14 of China’s biggest cities in coordination with eight leading Chinese banks.
The mechanism embeds payment information inside an NFC-enabled SIM card, in contrast to other platforms such as those in the US that tend to store payment information inside the mobile device itself.
The goal for this project is to roll out the NFC payment capability to 100 cities in China in the near future.
You may be familiar with NFC technology powering mobile payments from Google Wallet to ISIS, or perhaps some marketing uses that are similar to QR, but the use cases for the tech spans far beyond these two instances. At this year’s CES we saw NFC used primarily for device pairing, like connecting your mobile with a smart fridge or speaker system. But LG takes that concept to a whole new level with their “Pocket Photo Printer” which will print photos from your camera simply by tapping it against the printer. The printing happens nearly instantaneously, speaking to fast data transaction through the tags. This could be pretty fun theater at events and is a great example of using NFC to trigger real world events.
As if providing embarrassing photos from your trip to the bar last night wasn’t simple enough with Facebook, Budweiser has provided another factor: the Buddy Cup. The Brazilian arm of the beer giant is introducing what are probably NFC-equipped cups to its branded events, offering participants the opportunity to enter their Facebook credentials on a page accessed via a QR code (there they are again) on the bottom of the cup. After this slight barrier to entry, any “cheers” with a similarly equipped cup will lead to a friend request being sent (and why wouldn’t Budweiser gain a “like” in the process?) and accepted. While this is an interesting application of emerging technology, its activation of brand values could lead to some unfortunate realizations on the morning after. The Buddy Cup was created by Agencia Africa in partnership with a digital advertising studio in Brazil called Bolha.
In a big step forward from Paypass, Mastercard will be launching Masterpass, a new payments system that creates a unified digital wallet. Masterpass brings together various forms of payments from NFC to QR into a single account across credit cards and merchants. The solution streamlines online checkout as well without the need to enter details before purchasing so it’s not surprising Mastercard already has plenty of leading merchants and banks onboard for their Australia launch.
Yesterday afternoon at Mobile World Congress, a panel gathered to discuss the opportunities and challenges facing NFC in the retail space presently and in the near future.
Before diving in to what was covered, there’s an important technical detail to discuss that is often not covered at the lab because it is a little too in-the-weeds technical, but is relevant in this context. When we tap a phone to read an NFC tag, the phone is acting as the reader and the tag is being read. In a mobile payments scenario, the Point Of Sale system (or in the UK, “The Till”, as was discussed today) is the reader and your phone is being read. Specifically, it is the secure element that is being read and more often than not that circuitry lives inside one’s SIM card. The carriers in particular are enthused about this arrangement since they control the SIM card and would enjoy having the future of payments standardize around their equipment.
In any case, SIM-based NFC is gaining momentum. There are now 80 million NFC-capable handsets out in the world and 40 million NFC SIMs in those handsets. So to recap, if an NFC-capable device has a regular SIM in it, then it can act as a reader but cannot itself be read, or at least cannot be used for payment.
The panel identified 4 core challenges facing the wide adoption of NFC:
- There needs to be a robust ecosystem of services across multiple verticals to entice consumers to demand the technology of their providers
- There need to be killer apps for the technology beyond payment. Transportation is a good example of a space that could take advantage of this.
- The specification needs to be standardized globally, and the testing and certification process needs to be streamlined
- There needs to be common iconography and a standard global customer journey. If that sounds difficult, consider that there are only 1 or 2 customer journeys that are standardized for plastic credit card usage globally. So there’s hope it can be achieved.
Retailers are not feeling pressure right now to adopt NFC-capable terminals. Consumers are not demanding it yet. One suggestion would be to add some kind of analytics layer, or some kind of mechanism of consumers tapping a check-in when they enter the store. The extra data stores could stand to learn about their customers could sweeten the pot enough for them to invest in new equipment.
Retailers are feeling some confusion right now because lots of vendors are trying to sell them lots of divergent payment systems and their POS cycles are too long to make a big investment in the wrong technology. They by and large need more certainty before they can bet on a particular technical standard.
One hope about increasing consumer demand for paying with their phones is the general theme that phones are increasingly becoming central to people’s lives in many other ways. The hope is that by 2014 or 2015, the demand to pay with one’s phone will organically grow out of this trend requiring less assistance from big industry programs.
A possible manifestation of NFC payment that could speed this process would be a mechanism where readers are built into laptops, and users can tap their phone to their laptop to pay for items. This solves a pain point for consumers, that of having to key in their credit card number to make a purchase online.
One strongly held view among many of the panelists was that payments will not be the killer app that launches NFC. There’s got to be something utilitarian that improves people’s lives in a more substantial way that gets them interested in the idea od tapping their phones. This may not even be a tap-your-phone-to-a-terminal type interaction. Perhaps it could be a peer-to-peer tapping experience like Android Beam or tapping a phone to tablet.
In terms of non-payment use cases for NFC, many general ideas were discussed. A retail expert suggested the ability to tap as you enter a store to load your loyalty account with special deals just for you. A town manager form the UK suggested civic and public interest uses of NFC out of home in the city centers might help spur adoption.