Near Field Not So Far Away
It is inevitable that you have already, or if not will soon, experience the buzz surrounding NFC technology. The transition from mere concept to universal adoption will undoubtedly take time; however, evidence leads us to believe that this year will be a pivotal year for NFC. We can expect to see pilots, projects and trials come to fruition, blossoming from seeds to full-blown commercial deployments. Of course, there are many drivers to the acceptance of NFC technology–education, awareness, availability of devices, widespread infrastructure, penetration of devices, cost, revenue, marketing incentive and convenience to name just a few. In the end, it really comes down to developing a solution that is secure, easy and convenient for the consumer, merchants and the rest of market to grasp.
A recent study from Juniper Research has revealed that one in five smartphones worldwide will be equipped with NFC functionality by 2014, which equates to almost 300 million NFC-capable handsets. By 2016, research suggests that there will be over 550 million NFC-enabled mobile devices dispersed globally. So what does this mean for the market? While a vast majority of the near field communication hype has revolved around mobile payments, there are endless possibilities for apps and uses. As time progresses, we will certainly experience the fall of cash, credit cards and loyalty cards from the mainstream marketplaces; whereas these items that once played an integral role in society, NFC will now pave the way to a world comprised of cashless transactions, paperless ticketing, keyless rentals, continuous information, quicker real-time location check-ins, interactive marketing, on-the-spot data records and so much more.
When leaving homes today, people must reinforce that they have their keys, their wallet and/or purse as well as their mobile device. Now imagine if that phone of yours was embedded with an NFC chip. A more convenient, speedy and easy way to gain access, make payments and save time will certainly serve as a catalyst for the adoption of “contactless.” So why will NFC play such a vital role within the forthcoming years? It’ll be a step towards:
1. Cashless payments. Why will NFC payment systems be so popular you ask? Well, as of now, there is nearly 20 billion credit card transactions annually with a projected 15% of all card transactions being mobile by 2013. In 2011, Starbucks experienced roughly 26 million mobile payments with coffee patrons loading $110 million onto their cards via mobile apps. Long story short, this is indication that mobile payments has gained some immense popularity with consumers. Take for instance Australia, which as an entire nation is moving towards a cashless society with the latest trends indicating a rise in the number contactless payments.
2. Paperless ticketing. Imagine the day where you can simply take out your phone, wave it and walk right into any event, onto any bus or train, or even check-in for any flight. The world has already begun being introducing paperless ticketing with a number of music festivals in the United Kingdom and the 2012 Olympic Games in London soon deploying the technology. To date, several major cities have implemented NFC into mass transit–Nice, Milan, Madrid, Moscow, Tokyo and even New York’s MTA has launched pilots for the Long Island Railroad. Traveling by air can sometimes be stressful; however, NFC will look to simplify the process as four in five airlines are projected to embrace the technology by 2014. Additionally, Orange has been working hand-in-hand with other wireless carriers to create an NFC system in Nice, France, by using Samsung smartphones in a host of applications, e.g. food and train ticket purchases, bicycle rentals and coupon distribution.
3. Keyless rentals. Just think of the possibilities here. People will no longer need to visit a front desk whether it be for a car rental or a hotel check-in. Using near field communication, renters (or tourists) will be able to locate a car, wave their mobile device and unlock the door to their selected vehicle. Just think of the potential here for car rental companies with over 76 million rentals annually, generating over $22 billion in revenue. From a manufacturer perspective, over 60% of car makers intend on implementing NFC in their vehicles in the forthcoming years. The world leader in automotive keyless entry systems, NXP, and Continental have developed keyless entry systems. With the expected rise of NFC technology, the two companies are taking this application to the smartphone. By adding NFC connectivity to the key or the car directly, any automotive OEM can pave the way for an NFC-enabled phone to become an extended feature of the vehicle.
4. Intuitive marketing. Let’s face it, grocery shopping can be a rather tedious task; to make matters worse, you’re a parent with kids pulling from both arms, you’re a businessman required to take a call or you’re just not really in the mood to pull several coupons from your wallet. “Couponing” has become one of the latest crazes to hit the marketplace. Well, now NFC can alleviate the humdrum process of presenting coupons at the cash register; shoppers will have the ability to tap or wave their mobile device, thus nullifying the need to find, pull out and present those paper cut-outs. The shopper’s data, loyalty points and credentials are embedded within a chip (that is linked to the respective account) found in the phone. Juniper Research has revealed that the total redemption value of mobile coupons is projected to exceed $43 billion worldwide by 2016, testimony to the valuable future role NFC technology can serve.
NFC allows for the collection of information you really want—location based services with intent. Marketing will serve as a key player, arguably one of the most popular future applications of the technology. When a critical mass of mobile devices are equipped with NFC and PoS systems have built-in NFC readers, shoppers worldwide can expect to experience a universal adoption of NFC-based coupons. Other than coupons, NFC offers the opportunity for marketers to develop interactive smart posters–event, movie, product and other promotional information is transmitted directly to an enabled phone via the embedded tag in the ad.
NFC will be associated with contactless point-of-sale terminals, product catalogs, couponing, special offers and so forth. Shoppers will be encouraged to browse through images of items on shelves with their smartphones and simply “tap” the image to add the product(s) to their shopping cart. These items will then be purchased and delivered, eradicating both the necessity of heavy bags, wallets and time. NFC will serve as a key influencer in retentive marketing – the ability to unite loyalty and reward programs into the payment process can trigger incentives that encourage customers to return.
5. On-the-spot access and records. In tomorrow’s world, upon walking into an emergency room or any healthcare office rather, your medical records can be made readily available with a simple wave of an NFC-enabled mobile device. To date, there are nearly 50,000 nurses in the Netherlands that use NFC to track and manage visits. Other applications of the technology in this setting include patients using mobile devices to check-in at medical facilities, to download content on prescriptions, to make payments on their current balances, to view medical history and so forth. From a professional perspective, employees will be able to obtain access to the facilities by simply waving their NFC-enabled device, to clock-in when visiting patients and to access information on patients.
6. Enhanced social media. Just bringing two NFC-enabled devices within close proximity will allow for the speedy and secure exchange of data including, but not limited to, music, apps, and contact information. Also, smartposters will allow for real-time “likes” and check-ins from any participating establishment and the ability to share an assortment of useful information. In a recent Ask Identive post on the role NFC will play on social media, Identive’s Vijay Kumar conveys the notion that near field communication is a complementary technology that facilitates social networking in a secure way. Social networking is certainly on its way to evolving beyond just interactions between individuals. Case in point, a business can now be enhanced or can even thrive solely through social networks. The popularity of social networking as a de facto medium of communication among the thinking public is dampened only by privacy and security concerns. NFC helps to alleviate some of these concerns and helps bring people closer. The advent of mobile devices (and their embracing of NFC technology) means that social networking is no longer restricted to the PC.
7. Endless exchanges. Last August, the Museum of London introduced the use of NFC with several of its exhibits. In the ‘near’ future, museums and galleries will implement the technology to enhance the visitor’s experience with acquiring information, audio and video via a simple “touch” of your NFC-enabled smartphone. That mere “touch” can also access endless information via maps, rewards, promotions, P2P exchanges, gaming, music downloads, etc. With the adoption of NFC in the years to come, you will no longer need to ask a retail worker whether an item is in stock, no longer have to google restaurant reviews, no longer will have to sign-on to Facebook to exchange social information, and no longer need to pull out (or carry) a business card. Using NFC, you will be able to find the nearest whereabouts of your favorite sneakers, to see what others in the area had to say about the dining establishment on Yelp, to become instant friends with your acquaintance on Facebook, and to exchange all business contact information with someone you met a trade show all by simply bringing two NFC devices within close proximity.
The fact of the matter is that mobile technology has become a vital component to everyday life. The mobile space is on the cusp of a new horizon when it comes to near field communication–The sooner the market recognizes its potential, the sooner it it will that the technology spreads like a wildfire. Just think, remember back in the day when Bluetooth and smartphone cameras were just an innovative feature for some? Now they have transcended into a full-blown commodity for all. My prediction is that NFC will follow a much similar path.