But the idea — walking into a store, being recognized, and being able to buy something without having to use any physical object to complete the transaction — is too great to pass up.[From PayPal Showed The Future Of Retail Today — And It’s NOT The New Credit Card Reader]
Right or wrong? I can take out my phone and run my CardCase or PayPal here and have the store recognise me via location-based services (LBS), or I can take out my phone and tap it. Now I like LBS, but I also like NFC. Which one is better? There’s only one way to find out…
There’s no argument that LBS are going to be huge, and there’s no argument that retailers will pay for them, so they are an obvious value-added service to offer on top of a zero-margin payment service.
Loopt, one of the early location-based services, is announcing that it has been bought by Green Dot Corp ., a provider of retailer pre-paid cards which will use Loopt to develop mobile wallet and payment services.[From Location-based service Loopt bought for $43.4M by Green Dot Corp — Tech News and Analysis]
So it isn’t the service that’s the issue, but whether the convenience of automagic services will satisfy the requirements of retailer and consumers alike. Here’s what I mean. When I presented some NFC applications to an advertising agency at the request of a client, the ad guys said that they liked the idea of people tapping things because tapping is what they called “a call to action”. In other words, the consumer is expressing an instantaneous desire for something. I rather like this and, personally, I’d rather tap than turn on some wallet software that broadcasts my location (or run an app and scan a QR code).
Whether this convenience will be enough to win out is, of course, hard to say at this point especially since the non-payment applications that I’ve seen so far are all “simple” tag reading applications that just pick up a phone number or a URL from a tag. No-one, as far as I can see, has yet implemented either the digital signing of NDEFs or interactive tags that can do cool stuff using SNEP (i.e. “real” NFC with two-way communications).
The Simple NDEF Exchange Protocol (SNEP) is an application-level protocol suitable for sending or receiving messages between two NFC-enabled devices. Previously, NDEF could only be used to NFC tags in reader/writer mode. Now, SNEP allows seamless interchange of data by enabling NDEF in peer-to-peer mode.[From The Paypers. Insights in payments.]
On balance, then, I think that “real” NFC offers considerably more than QR codes and offers more control than the slightly-spooky LBS. But it may be that I’m too old to appreciate the convenience of wandering into the Woking Poundshop and being greeted with a cheery “Hello Mr. Birch, would you like another bulk pack of haemorrhoid cream?”. I would prefer the more active experience: I wander into McDonalds, tap my phone on a (digitally-signed) tag by the counter to connect to wifi and then tap my phone at the POS to redeem my coupon for extra fries, pay and get my loyalty points all in half a second.
I have to say, by the way, that I’m not convinced that any amount of payment convenience, calling people by name or managing loyalty offers is going to help the physical store very much, at least in the UK. Yesterday I needed to buy a phone for a relative, so I called two local mobile phone shops to see if they had the particular handset in stock. Neither of them picked up the phone and in both cases I left messages asking them to call me. Needless to say, neither of them did. Driving home from the station, I was thinking of popping into a store to pick up a couple of things, but to park outside the Tesco Metro and Co-Op costs £1 which, even if I was prepared to pay it (I’m not) I don’t because I can’t be bothered to find to walk down to the machine and find coins to feed in to it. The UK High Street is dead as the Dodo and neither NFC nor LBS is going to save it it.
These are personal opinions and should not be misunderstood as representing the opinions of
Consult Hyperion or any of its clients or suppliers