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Near Field Communications' time is near

Kelly Bishop  |  by Kelly Bishop

Imagine if you could place your daily coffee order from your mobile phone, tap your phone against a poster or podium to check in when you arrive at the coffee shop, have the barista call your name a few seconds later, then tap your phone to pay, and on your way out receive a thank you note from the coffee shop with an offer for $0.50 off your next latte? Pretty cool, right? And that technology is already being used!

How does NFC work?

Near Field Communications (NFC) is an up-and-coming technology using short-range wireless data transfer. The technology can be embedded in phones, tablets, stickers, posters, product labels – practically anything! It allows for two-way communication between devices so users can “tap” one NFC chip against another to transfer information: product details, specifications, even payments.

In late 2011, Google introduced Google Wallet with Citi, MasterCard and the Nexus S 4G phone from Sprint as a new form of payment by mobile, allowing users to swipe or tap their phones at select merchants to pay for their purchases. Although not widely available yet, mobile payment system technologies like NFC are coming, and experts are saying that wireless payments will be standard in the next 2-4 years. At the rate people are turning over mobile devices (on average, every 18-24 months), this means that we’re looking at a revolution in how payments are processed.

NFC applications in the retail environment

As a retailer, you need to be prepared for this eventuality. The commerce ecosystem is changing, and you need to get ready. While NFC will likely impact the service industry more quickly than retail (with mobile device/NFC check-ins, ticket redemption, and ordering helping to alleviate the typical bottlenecks at hotels, theaters and restaurants, for example), retailers should be preparing for an NFC future as well. For instance, if the products you sell have NFC tags, a dedicated checkout lane could be developed that lets customers who are part of an NFC program simply walk through a set of scanners that read her merchandise and her phone and charge her account accordingly, without her ever breaking stride. Or products could broadcast individualized discount offers to a shopper as he passed them in the aisle. It will also be able to track loyalty points or redemptions and any available coupons in one tap.  Just think of all the insights you can garner about your customer when all of that can happen simultaneously. And what a great way to communicate one-on-one via follow up messages! Start getting these systems in place now – you don’t want to be behind the curve when NFC is standard.

Making your phone even more indispensible

I can’t believe we’re nearing a time when many of the items in my purse can be replaced with my mobile phone, but since my phone is the one thing I refuse to leave the house without, I love the thought of how convenient this could be. What do you think? Is this a technology you can see yourself embracing and using, or are you hesitant?

Comments

Sarah Miller  | 
I love paying for my Starbucks using my mobile app. While it's not NFC tech, I'm all for one less thing to carry around or dig out of my purse. Bring on the technology!
Adam Schneider  | 
Absolutely! I think the key to NFC and it's appeal to the consumer will be the simplicity. Unlike QR codes that require app downloads to make static images and products interactive, the optimum use-case of an NFC generated connection is imbedded hardware that removes many time consuming steps. My only concern is that the market will push too hard to turn mobile payments into NFCs trojan horse when the best way to ensure adoption is to have chips and equipped handsets tie to every-day transactions first. Just imagine it's 1995 and we're asking people to use the internet to conduct financial transactions before they ever searched a keyword or used mapquest...or even sent an email. Not a perfect analogy because all of these actions were never done before...but I think it's importan to consider the value of simple consumer interactions as a way to teach and ease adoption rather than jumping directly into the most complex, albeit most compelling use-case first. We'll see...either way - we're very bullish around here...and sooner than later.
Kent Stones  | 
I really like Adam's point, but I think it is inevitable that a lot of different and complex uses will be generated in a very quick time. And, also inevitable will be a high proportion that flame out because the market isn't ready yet or they are underfunded for a long-term endeavor. My hope is that there will be companies that employ the technology that do so based on the forward-looking potential for the technology and will be patient. That seems to be the way many markets evolve now, so I'm confident that will happen here.

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