NFC: It’s Not Just For Payments

Copenhagen 31/07/2013

Back in June, Natasha Lomas penned a rather angry article in TechCrunch, bad mouthing NFC like there was no tomorrow. We thought we’d answer by writing this article about how people do care about NFC, and just how widely it is – and can be – used. Her article, entitled Nobody F****** Cares and Apple Gets That (nicely done, Natasha), basically says that NFC has been around for years, and if it hasn’t caught on yet, it never will. Apparently Apple is the only one who gets that (what about if (when?) Apple, with their 575 million credit cards in the system, rolls out NFC payments?). But we’re not here to badmouth her article. We see mentions of NFC – explanations of what it is mostly – pop up all over the place. Newspapers and blogs talk about NFC, what it stands for and what it can be used for every, single day. You could argue that if they’re still doing that, then surely it’s a sign that the technology just hasn’t broken through. Or, you could argue that the frequency with which it appears clearly signals a rising interest. Of course, we believe the latter. Yes, the technology has been around for a long time – the early 2000s. In fact, the first NFC phone was the Nokia 6131, which launched back in 2007! Unfortunately, the tech was quickly lumped together with mobile payments. “We see NFC as merely a technology enabler for several types of mobile contactless services; we don’t believe the majority of consumers will use mobile contactless payments before the end of the decade, even in the most developed countries like Poland and the UK,” writes Forrester’s Analyst Thomas Husson in the report, entitled “NFC: What Lies Beyond Contactless Payments.” The easiest way of looking at NFC is to use the Gartner Hype Cycle. Hype-Cycle-NFC Here’s a breakdown:

  • Technology Trigger: A potential technology breakthrough kicks things off. Early proof-of-concept stories and media interest trigger significant publicity. Often no usable products exist and commercial viability is unproven.
  • Peak of Inflated Expectations: Early publicity produces a number of success stories—often accompanied by scores of failures. Some companies take action; many do not.
  • Trough of Disillusionment: Interest wanes as experiments and implementations fail to deliver. Producers of the technology shake out or fail. Investments continue only if the surviving providers improve their products to the satisfaction of early adopters.
  • Slope of Enlightenment: More instances of how the technology can benefit the enterprise start to crystallize and become more widely understood. Second- and third-generation products appear from technology providers. More enterprises fund pilots; conservative companies remain cautious.
  • Plateau of Productivity: Mainstream adoption starts to take off. Criteria for assessing provider viability are more clearly defined. The technology’s broad market applicability and relevance are clearly paying off.

To us it seems pretty clear that NFC is lounging around in the trough, like many technologies have done so before. Despite the fanfare that sounded a few years ago, we aren’t all tapping our phones to pay for things, or activate certain features on our phones. However, that doesn’t mean we never will. We have to figure out exactly where and when this technology should be used – where does it actually make sense? Where can it give the end-user some benefit? Does it save money – for end-user, provider, or maybe both? Does it save time? Are enough phones NFC enabled to warrant the use of NFC. But we are working on it, slowly pushing ourselves out of the trough, and up the slope of enlightenment, finding areas that NFC definitely makes sense, as well as working on the technology that is needed to make NFC payments ubiquitous. You don’t have to look very far for proof. The most obvious, for us, is ticketing. NFC ticketing (using NFC technology to pay for and validate transport tickets) is very much a real thing in France, Russia, the UK, and of course, in airports. The last example is really exciting – one common complaint about mobile payments and NFC is what would happen if your phone died, well with the right technology, that wouldn’t matter; the POS device, or validator, would power the NFC chip itself. No phone battery needed. The technology is also being used in ads, from billboards in airports to 10,000 NFC ad panels across the UK and the subway in Stockholm. There are many more examples, and so many possibilities with this – sharing music, video clips, money-off vouchers – NFC and advertising is a perfect match. NFC is also playing a huge role in redefining the shopping experience, both with an interactive screen and in-store NFC (you can check out an interview with Think & Go NFC at the end of the article). In line with shopping, NFC equipped smartphone sales rocketed up by 300% in 2012 – and they’re not going to stop selling. Even libraries and museums, like this one in Japan, and this one in London, are using NFC to provide people with information – just tap and get extra information about the piece or book you’re looking at. Brother’s new printer, and Sony’s SmartWatch 2, speakers, business cards – there are hundreds of examples where NFC is being used to full effect – and this is only the start. The possibilities are examples we can’t even dream of, which is what’s so wonderful about innovation. So NFC is getting there. It’s working its way up the slope of enlightenment and will find its way on to the plateau of productivity (our money’s on transit playing a big hand in that), and then, payments will really kick in. One day, we’ll look back and wonder why on earth we didn’t think of it before.

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Lara Mulady
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