What does NFC mean to your business?
Posted by Peter Gough, Design Partner / Founder at ORM on 07/03/2013
Follow Peter on Twitter
NFC stands for Near Field Communication (you should know this by now...) – it's a chipset inside your smartphone that can be programmed with secure information and used to talk to other NFC enabled terminals, devices and chips by tapping them at close proximity. It is an important fact to note that 14 out of 15 latest smartphones have NFC chips inside them.
The popular use-case discussed using an NFC enabled smartphone is the replacement of physical credit cards and cash to the mobile wallet – we've been working with our client Monitise on a variety of NFC smartphone UI's for a few years now, helping prototype ways of how people will select their 'virtual' credit cards ready to tap their smartphone against NFC enabled ePoS terminals - focusing on the user journey and experience to make it as frictionless as possible.
Although the mobile wallet is ready and out there we still think it will be a while before NFC payments truly take off – for a start there needs to be a drive towards merchants being enabled with NFC enabled PoS terminals, and here's some facts:
- In 2013, there may be as many as 300 million NFC smartphones, tablets and e-Readers sold*
- By 2017, 53 per cent of all point of sale terminals worldwide will be NFC-ready**
- NFC Payments To Reach $74 Billion Worldwide By 2015***
For us, the issue is that currently there are so many players in the market developing their own eco-systems that interoperability will be key to making NFC a success... but we're seeing progress, just look at the Visa Europe and Samsung partnership announced at MWC, with the new Samsung products incorporating the Visa payWave applet and technology – and don't forget Apple haven't even thrown their hat into the ring yet so it will be interesting to see how they proceed.
Without doubt NFC payments will become mainstream, but it will be take a little while longer than perhaps our industry expected. At ORM we feel there could be some other interesting use-cases for NFC that could help people get used to the new paradigm of 'tapping' objects with their smartphone.
If you were at MWC13 you would of seen many instances of electronics manufacturers such as LG and Samsung using programmable tags to change the settings on their devices. Imagine walking into your 'Samsung' branded home and tapping your phone against a little NFC tag by your front door – the tag has been programmed to change your smartphone settings such as connecting to your WiFi, turning your ringtone down, connecting to your media server etc? Another tag on your bedside table sets the alarm on your smartphone for 7am the next morning – these aren't the most exciting examples but you get the picture, you could have programmable personalised tags all over the place, from your car to your office desk, designed to change device settings based on your environment.
This is a good start to get people comfortable with using NFC – you can easily see the next step in its evolution as the user progresses to tapping third-party tags as they interact with OOH advertising and promotions. There are already good examples of using NFC tags at poster sites that gives the user discount coupons and offers. Tapping a tag on a product shelf in a supermarket may give you a recipe for the ingredients and a voucher for check out, or tapping a vending machine to get free samples – the list goes on and could become a powerful marketing application.
Once people get used to device-to-device or device-to-tag interactions we will start to move into more complicated use cases such as micro payments that are connected to your mobile network operator, payment business or retailers – such as using your phone to purchase low cost items from vending machines or quick payments at a coffee shop. These can already be done without NFC and there's some talk about whether its actually needed but either way, we will start to get used to smaller purchases at first with single or no factor authorisation at the purchase point – just like tapping your Visa payWave card on the PoS terminals at Pret-a-Manger for your Crayfish and Avocado sarnie!
You can see how this progresses to ticketless entry – using smartphones as secure ticketing entry into big music and sports events. This is being done already, it's not new – it just requires infrastructure change that many organisations are now starting to invest in. And while we're talking entry – your NFC-enabled smartphone can provide keyless entry to your office, hotel room, even your home and vehicle.
This utopian dream of controlling everything from your smartphone is becoming reality – the question is whether the technology is actually solving problems that need solving, or perhaps it was created by men fed up with losing their wallet and keys!
Some industry experts believe NFC is old technology that the GSMA are still trying to shoe-horn into our lives that many of the use-cases mentioned can be solved without chipsets - look at PayPal Here ,for instance, which uses standard data and WiFi connections together with geo-location.
We feel that the significant investment electronics manufacturers are making into NFC means it will be adopted, but perhaps not as the de-facto and only method for some of the use case examples below:
- Smart tags – control device settings
- Promotional Tags – vouchers/offers/content
- Tickets – Events, sports, concerts
- Transportation – ticketless travel
- Keyless entry – Hotels, vehicles
- NFC checkout – mobile wallet payments
- Misc – file transfers, business cards, syncing etc
We'll make sure to have some demos on how some of our clients are thinking about NFC at one of our next round table events. Email us at email@example.com if you want to be kept informed about our small and informal events.