One hundred consumers who shop at the C1000 grocery store in Molenaarsgraaf, the Netherlands, have begun paying for transactions with mobile phones equipped with Near Field Communications (NFC) RFID chips. The group is participating in a six-month pilot conducted by Schuitema, the nation’s second largest retail chain,[From RFID Journal – – RFID (Radio Frequency Identification) Technology News & Features]
Well, the pilot is now complete and the results are in. The guy from the retailer who was presenting said that he was extremely surprised because he had "never, never" seen such a positive results from consumers and that they never had a single technical problem in six months. Wow.
The market research contained, I think, an interesting nugget of information that will be grit in the oyster of someone’s business plan. It turned out that the service was a fantastic success with the customers, and 49% of them said that if the service were offered then they would buy a new handset to get it! More than half, and I suspect this is the important figure at the current state of evolution, said that they would switch operators to get an NFC service. Overall, there was a something like 90% approval rating for the service.
Yet, when pressed on costs, 78% of those consumers said they would not use their NFC payment "card" if they had to pay more than they do for using their existing payment card. Just to reiterate: they would be happy to spend money on buying a new phone, but not on a paying a bank a little more.
I think this supports my big picture theory that we spend our whole time thinking about NFC payments, but that for consumers NFC is way cool for lots of reasons and payments aren’t one of them. Given a phone with NFC, they are very happy to use it for payments. But payments by itself may not be enough to generate additional revenue. If a consumer goes into a shop looking for a NFC phone — they won’t, because they don’t go into shops looking for Bluetooth phones now, they just expect it — it’s because they want to use it for loyalty, access control, smart posters, coupons, ticketing etc.
The implication of this is surely that operators are better off embracing NFC and spending their time thinking about the new value-added services that they may offer than digging their heels in and trying to extract fees from banks. There are plenty of barriers to NFC payments already:
Expansion of this market space will require proliferation of merchant points of sale equipped with NFC payment terminals, broad-based operator support, and widespread consumer adoption of NFC-equipped devices once the other prerequisites are in place.[From Industry Outlook 2008: M-Commerce – RCR Wireless News]
The operator strategy must be to look beyond payments and work on making the pie bigger.
These opinions are my own (I think) and presented solely in my capacity as an interested member of the general public [posted with ecto]