Will NFC become the m-commerce standard?

The last couple of years have seen the emergence of some ‘niche’ payment and data transfer platforms or apps for smartphones.

But Mark Bartlett, managing director of Surrey-based signage design and manufacturing firm Signbox, told Retail Technology in the next in its  Ask The Experts series it is widely recognised that the breakthrough technology is unequivocally near field communications (NFC). 

“It’s the most scalable and secure of all mobile payment and wireless data transfer technologies and NFC represents a paradigm shift in how we live – making everyday activities easier and more convenient,” he said. “Using an NFC-enabled smartphone will make accessing new media and content not just truly interactive but much more intuitive; make it easier to pay for things; easier to discover and share information and much easier to use transport – in this one area alone NFC could have a major impact on our lives with travellers using their phones as fare cards or to store long-distance tickets without fear of losing them. 

“Since the technology is two-way, receipts could be sent back to commuters as soon as they enter a gate or complete a journey. Meanwhile travel operators could benefit from reduced operational costs and fare evasion; increased efficiency and environmental sustainability. And the potential uses extend beyond the turnstile. By tapping their phones to posters around stations and on platforms, commuters could get updated service information, request assistance or directions and even report problems.”

Bartlett suggested keys, access cards, tickets, business cards, plastic loyalty cards and payment cards could easily disappear – replaced by an NFC-enabled smartphone. “In fact it’s been said that the myriad applications for NFC are limited only by imagination,” he said.

He declared that the only thing that has held NFC back is critical mass – the number of NFC enabled smartphones in use. And this has created the classic ‘Catch 22’. The extra cost and engineering effort of embedding an NFC chip into a smartphone has led to a slow roll out by manufacturers. Meanwhile retailers and merchants have not upgraded their payment systems to exploit NFC because not enough consumers have the technology on their phones.

“But now things really are changing with mobile manufacturers driving the push for NFC,” he said. A new report by ABI Research shows that the number of NFC-enabled devices hitting the market will greatly increase by 2014. This latest research indicates that at least 285 million NFC-enabled mobile and consumer electronics devices will ship in 2013 and that number will increase to over 500 million in 2014.

“So we can now say with confidence that this new world where people use their phones in a different way is upon us and not simply guided by NFC driven mobile payments,” Bartlett added. “In reality the NFC market is shifting from payment applications and it’s estimated that by 2016 70% of NFC tag shipments will end up being used in marketing and promotional applications.”

This trend has coined a new term – proximity marketing – with smart posters and smart stickers at the forefront of these opportunities. “Smart posters are just that – no longer an inanimate advertisement but interactive media that communicates with an NFC enabled smartphone,” he explained. A smart poster can be pre-programmed with a range of data or information that will transfer instantly to an NFC enabled smartphone with a simple fast ‘tap’ of the sticker. So when the user taps the poster a browser opens up with a video, coupon, list of stores, directions to nearest store, special offer or whatever promotional offer a campaign manager chooses to deploy.”

Proximity marketing opportunities will expand further now that, as Bartlett pointed out, smart stickers are also available. “Small and compact, about the size of a beer mat, they inorporate an NFC chip. Once that chip is pre-programmed, anyone with an NFC enabled smartphone can retrieve information from the smart sticker with a simple swipe or tap of the sticker,” he said.

He also suggested that, as a phone can read an NFC tag through glass or acrylic, any business can stay ‘open’ 24-7 allowing consumers to download product information, a restaurant menu, voucher relating to a shop window display, call a cab, retrieve details of a property and so on – any time of the day or night.

“When you think about it you’re connecting chips; chips embedded in devices. It’s this simplicity and ease of connectivity that makes NFC the technology that will make people wonder, in years to come, how they ever lived without it,” he concluded. “No services to sign up to; no pins or passwords to enter. Just tap, connect, receive and share information, offline and online. When a smartphone becomes an NFC reader the possibilities really are endless.”

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