NFC: What Lies Beyond Contactless Payments

Forrester estimates that close to 100 million Near Field Communication (NFC) devices will ship in 2012. As it finally moves past the chicken-or-egg stalemate of the past five years, contactless technology is once again causing buzz in the mobile world. The 2012 London Olympics will be a showcase and marketing catalyst for NFC services. Will NFC join the cemetery of overhyped telecom acronyms, like DVB-H, or will it scale to enable new product experiences? We expect NFC usage to remain niche in 2012 and even 2013. However, moving forward, NFC will be embedded in most smartphones — and in a greater range of connected devices — enabling many more use cases than just contactless payments.

NFC Is Emerging As The Global Mobile Contactless Standard

With 100 million NFC mobile devices expected to ship globally by the end of 2012 and a growing NFC infrastructure, NFC is emerging as the standard for contactless solutions across the world. Pioneering countries include South Korea, Poland, Turkey, the UK, the US and to a lesser extent France.

Expectations For The Uptake Of Mobile Contactless Payments Are Too High

Turning adoption into mass-market usage among consumers will require not only a lot of market education but also, more importantly, the construction of a value proposition for consumers and merchants that goes well beyond convenience and speed to adding value to the entire commerce process. My colleague Denée Carrington has just published a report on this topic: “Why The Digital Wallet Wars Matter.”

NFC Will Open Up Many Other New Product And Service Experiences

The key long-term driver for NFC technology is that it can enable many new product and service experiences beyond just mobile contactless payments. The list of new use cases is long: convenient transport experiences; next-generation shopping experiences; authentication and identity management solutions; or immersive marketing experiences. NFC will also expand into other consumer and workforce connected devices, facilitating content and app sharing and cross-device experiences.

Clients who want to know more about this can download my report titled "NFC: What Lies Beyond Contactless Payments."

Comments

NFC for "international merchants"

Years ago, after an experience in a duty-free shop in the Middle East, I suggested to a friend at Visa that they explore what has now become NFC. At the time, the technology name/type was different. The idea was that in a place like a Dubai duty-free store, a passer-through with a Visa (or Amex or other card) could wave the card in front of the price, as electronically displayed. The display would pick up the cardholder's billing currency and convert the price to that currency.

Some consumer behavior study would be necessary to determine whether this would indeed be advantageous to the merchant. Perhaps a consumer's not knowing the value in his/her home currency encourages spur-of-the-moment purchases which they wouldn't make if they knew the "true value".