Why NFC is heading to your high street
If there's a business-focused tech topic that's about to break the consumer market in a big way, it's NFC (Near Field Communications). News that McDonalds plans to test NFC payments in stores in Austria and rumours Transport For London intends scrapping the popular Oyster Card system in favour of payments via NFC cards and devices suggest just how quickly things are going mainstream.
Just one year ago at MWC Barcelona the show floor was full of optimism at the NFC promise. "The technology has been around for some time, but handset vendors have been reluctant to add an additional chipset for no reason. They’ve need a firm commitment from operators that they plan to launch NFC payments," wrote our own Stewart Baines.
is this the beginning?
That commitment has arrived. Orange and other carriers are all making moves to support NFC. At the high-end, some Android-powered devices already support it. Device makers: Microsoft, Nokia, RIM, Samsung are all climbing aboard. Google’s Android OS carries some NFC support and Apple -- which had been expected to field the technology in 2011 -- now seems set to offer it up within October’s iPhone 5 release.
It’s a gentle start. As security and payment infrastructures are put in place, most NFC payment service deployments see the systems enable small payments of up to €25 to be made without the need to enter a PIN. Think public transport, parking fees, small goods purchases. The intention is that if a payment device is lost or stolen, then the customer -- and the bank -- are protected against major theft.
All this activity, married to continued work on part of Visa and Mastercard, mean the stage is ready for the NFC mass market, with a focus on payment and billing systems.
Mobile wallets and NFC could replace cash and credit cards for everyday purchases by 2020, according to a study by Elon University’s Imagining the Internet Center and the Pew Research Center’s Internet & American Life Project.
In an ISIS study with 18-34 year olds in the U.S. and UK, the majority felt more naked without smartphone than without their wallet. When asked if they would use a mobile wallet, only 15% said “yes” but 70% said they wanted “a safe, secure and convenient payment system.”
beyond the wallet
There’s implementations beyond using your devices as a wallet: smart posters, event ticketing (Ticketmaster’s already working on this); interactive museum exhibits. There’s dozens of potential implementations, some of which you’ll find inside this infographic (also available as a slideshow).
What about mobile users who aren’t in possession of an NFC-supporting device? No worries, systems like Paybox, VirtaPay and others bring older devices into the frame, offering hybrid payment systems. Barclaycard’s immediate plans include provision of PayTag stickers integrating an NFC chip which can be placed on devices to enable such payments. (Some may note the conceptual similarity between PayTag and Germany’s Convego system, which hit market there in 2009).
Introduced last week, David Chan, CEO of Barclaycard Consumer Europe, said of PayTag: “More than half of us say that the item we’re most lost without is our mobile phone, so we’re giving people the option of using them to make easy, convenient, everyday payments without the need to upgrade their current handset.”
no phone left behind?
Solutions like that adopted by Barclaycard were in their infancy last year, when Visa showed the NFC “jacket” for iPhone from DeviceFidelity. In comparison, this year’s MWC Barcelona saw a host of NFC-related activity, as noted by our own Kate Bourdet.
The missing piece in all these plans is seeding the market with terminals capable of receiving such payments. That’s something which is already quietly taking place -- just look for the ‘Contactless’ logo on the card-processing machine next time you pay for something in a shop. Barclaycard and Visa have been seeding these solutions for years.
We’re really interested in what you think. We know Orange Business Blogs visitors include some of the leading lights of the mobile industry, so do you think NFC is ready for prime time? Are you preparing to accept contactless payments in your industry? What are the barriers and the opportunities to the new tech?
image © Vladislav Kochelaevs - Fotolia.com