The world is bigger than my Oyster (card)?
There has been a lot of excitement around near field communications (NFC) for sometime. Most of us who live in or near London have an Oystercard and a few probably have debit and credit cards with “pay-wave” that allow us to buy sandwiches from Eat and Pret without having to put the card in the machine.
So when will NFC make a break through?
The newest Android phone is now equipped with NFC, and there is a rumor that the next iPhone will also be NFC enabled. This will hopefully open up and transform the mobile payment space. Currently some credit card companies are working with banks to issue microSD cards directly to consumers thus bypassing the mobile carriers. Despite NFC-capable SIM cards being available since 2009, there has been a limited uptake in the UK.
The success of NFC may be determined by the customer’s experience; service security and importantly the number of outlets with the technology to let you use it. NFC has the potential to create new and powerful customer experiences and business models. However the number of contactless terminals in the UK is predicted to be 26,500 by the end 2010, so clearly there is a long way to go before we can all benefit.
This year JPMorgan Chase, Wells Fargo Bank, US Bancorp and Bank of America Corp, worked with Visa Inc on a pilot program called In2Pay that lets customers use phone’s to pay for purchases in stores using Device Fidelity Technology. It looks like the big push at the moment is with the Mobile operatorsm who seem to be taking a two-pronged approach:
- Device enablement – The GSM association (including business such as AT&T, Vodafone, China Mobile and Deutsche Telekom) are working on a common standard for the NFC enablement of SIM chips and also their extension into non-phone devices to provide them with an globally understandable identity; NFC enabling the SIM is much more cost effective than replacing handsets with NFC enabled handsets
- Payment – The mobile operators are looking to set-up micro-payment mechanisms to exploit the commercial potential of a NFC enabled phone
Sarah Clark, in her report The Road to Commercial Deployment, tries to answer some of the key questions facing module payment in the future. Questions such as how the NFC market will evolve, what actions will the leading players take and what strategies for success will mobile network operators, banks, suppliers and key potential NFC service providers adopt?
However there is a much wider range of potential scenarios that the NFC devices may support, including:
- Replacement of access cards and keys at home, in the office, for your car
- Peer to Peer applications replacing WiFi / Bluetooth for exchanging data between devices
- Marketing with NFC hot spots on display advertising to get offers, web site urls, etc
- In store product information and navigation, e.g. location based tags that are linked to maps to help customers find products in store where mobile / WiFi may be limited
What is clear is that the next few years are going to see a seismic shift in the NFC market, that may well effect many areas of our lives, whether we realise it or not.
Image with thanks to Martin Tom @ Flickr