NFC: Near Field Communication. If you’ve not heard of it before, it’s about to become a household name. Why…?
Well, NFC is:
- Intuitive: NFC interactions require no more than a simple touch
- Versatile: NFC is ideally suited to the broadest range of industries, environments, and uses
- Open and standards-based: The underlying layers of NFC technology follow universally implemented ISO, ECMA, and ETSI standards
- Technology-enabling: NFC facilitates fast and simple setup of wireless technologies, such as Bluetooth, Wi-Fi, etc.)
- Inherently secure: NFC transmissions are short range (from a touch to a few centimeters)
- Interoperable: NFC works with existing contactless card technologies
- Security-ready: NFC has built-in capabilities to support secure applications
So in everyday language, that little smartphone that you have in your pocket, pretty much everywhere apart from in bed, is about to become (as well as your phone, contact book, camera, HD video recorder, games console and mp3 player)… your wallet.
But NFC is about much more than contact-less mobile payments – it can enable closed-loop location-based mobile marketing and loyalty initiatives, as well as provide marketers with invaluable consumer data to increase the relevancy of ads and offers. Wherever you go, your shadow follows…
“Google sees mobile, especially NFC, as something to bridge the online and offline worlds so that they can extend the advertising platform to the physical world. They are quite happy to facilitate the NFC transactions as they are really after the advertising revenues – what they get is information about what you, as a mobile subscriber do in the physical world, what shops you go to and what you buy.” – Sandy Shen, Beijing, China-based research director at Gartner. “
So who’s doing it? Well, it seems that the mobile payment format war will have more than one dimension, with every major player in telecom, internet sales, POS manufacturing and payment processing wanting a stake in this emerging system.
One of the major players Amazon, is exploring NFC as the next great frontier of mobile payments and retail, with the opportunity to boost loyalty, customer relationship management, special offers and marketing via contact-less technology.
On its busiest day in the US, Amazon.com processes around 8 million transactions. Compare that to the entire American Express network which processes an average of about 10 million per day.
“Amazon is one of the few companies that may not have to wait for NFC to become mainstream. Amazon has been connecting a customer’s laptop/PC to a retailer’s POS/servers for years. Given that the mobile web connects most smartphones to the Internet, and practically every POS device at every retailer has an IP address, Amazon is likely to use its existing infrastructure to allow customers to have a similar shopping experience to Amazon online, except with all of the fields filled out in advance. Amazon would hypothetically require only programming and partnerships, which would take months, not the years it will take for mass adoption of NFC.”- David Schropfer, author of The Smartphone Wallet.
So what does this all mean for the average man in the street?
Well apart from making it easier to do pretty much everything you’ll ever need to do from a small, 8mm thick, slightly larger than a credit card piece of unparraleled technology… losing your phone might just get a wee bit more expensive in the very near future!
