[Dave Birch] Had an interesting meeting with one of our customers, looking at their new technology strategy. One of the topics was, of course, NFC. NFC is in a funny state at the moment. There are no handsets — well, there’s one, the Samsung — that implement the new standard Single Wire Protocol (SWP). There are a few systems up and running here and there but they are all small scale and they almost all use the old Nokia 6212, a non-SWP handset released a couple of years ago.

Telefonica O2 aims to be the first operator with fully commercial payment services using the contactless technology, NFC (Near Field Communications). The carrier will launch such offerings, integrated into handsets, in the UK, Spain and the Czech Republic in late 2010 or early 2011, Michiel Van Eldik, Telefónica’s group director for new business and innovation, told Reuters. The firm already has a commercial pilot in the Czech city of Pilsen, using Nokia 6212 NFC phones, preloaded for use with local transport services.

[From Nokia looks for successor to RFID tags – Rethink Wireless]

I think Orange might quibble with this, as they hope to have commercial services operational in the UK (with Barclaycard) and in France (as part of Payez-Mobile). But anyway, there still seems to be a commitment to the technology. Partly because, as Liisa Kanniainen of Mobey Forum said in Singapore recently, the customer response has always been overwhelmingly positive and partly because so much effort has been expended.

Let’s see what a bona fide innovator has to say about this:

Aaron Greenspan. President & CEO, FaceCash: NFC is… “still not available in any of the SDKs we’re using from the major phone manufacturers, so it’s kind of irrelevant to us right now.”

[From MasterCard Will Open Its Doors to Entrepreneurs and Developers, Inviting Innovation – pymnts.com]

This wasn’t in the script. We were supposed to be engaging consumers by now, the handset manufacturers were supposed to have NFC chips in lots of models, the mobile operators were supposed to be ordering them, new services were supposed to be springing up on the NFC infrastructure. But, as of now, NFC is of no interest to innovators.

So why am I holding a candle for NFC, despite the fact that there are virtually no chips, virtually no handsets and virtually no applications? Well, the truth is that it works. And it works well. And consumers like it, which is the most important thing. You may well say “well why not use 2D barcodes instead?”, but the truth is that NFC just works better: it’s easier, simpler, quicker. Look at what happens with 2D barcode vouchers

customers and baristas alike instinctively try to “wave” the phone and the scanner in front of each other, but the system requires that both devices be held still.

[From Upside For Mobile Payments Comes Before The Payment – PaymentsSource Article]

Fascinating. This gels with something that an advertising guy told me a couple of years ago in connection with a prototype we were developing for one of our telecommunications operator customers: he was excited about NFC because he thought that holding out the phone and tapping a reader was, as he called it, “a call to action”, a natural human gesture. So the combination of contactless at the point-of-service and the mobile phone as carrier looks pretty promising. But there are no handsets. No wonder that

Citi plans to order some hundreds of thousands of the stickers for the commercial launch, NFC Times has learned. Customers will be able to attach the stickers to their phones or other devices to make low-value purchases. The Citi stickers are expected to be issued in several U.S. cities and carry a MasterCard PayPass credit application, which is accepted at about 70,000 merchant locations in the U.S., along with some taxis and vending machines, as well as locations abroad.

[From Citi To Make Its First Move in Mobile Payment | NFC Times – Near Field Communication and all contactless technology.]

The question, I suppose, is whether these “bridging technologies” (stickers, SD cards, SIM overlays and so forth) are just that, and that Nokia, RIM and Apple will be adding NFC interfaces with standard APIs to their models in 2012, or whether the inability of the operators and handset manufacturers to get NFC into the marketplace means that they have all missed the boat. After all if you issue the stickers to customers and they work well, why would you bother to cut a deal with an operator and get involved in all that complicated stuff about keys and certificates and applets and signing?

These opinions are my own (I think) and presented solely in my capacity as an interested member of the general public [posted with ecto]

3 comments

  1. Won’t the cost associated with issuing and frequently re-issuing the stickers (the average mobile phone is replaced every 18 months)and such like in addition to the cards be enough of an incentive?

  2. This is a good point Moshe, but I think that the opportunities to brand the stickers and perhaps even make them “fashion” will counterbalance. You could imagine sticking a “Glastonbury” sticker on the back of your phone for the duration of the festival then peeling if off when you get home, or whatever.

  3. That’s true, but if things move in that direction won’t that actually increase frequency of re-issuance and therefore the costs associated? Where does the issuer see a return on this additional cost?
    Although I’ve always appreciated the value of a sticker on the phone, colleagues are arguing that keyrings will offer greater durability and therefore be cheaper in the long run. I can imagine that consumers themselves will be split on preference and all this variety will just add to the costs for issuers…

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