Telecommunications, Automotive and Market Research

More than 15 years in the mobile telecommunications industry and an industry analyst since 1998.

Friday, March 25, 2011

Hold the Phone! NFC Isn't Just About Mobile Payments

The buzz about mobile payments is becoming overwhelming these days.

Despite the fact that I'm a big fan of Near Field Communication (NFC) being used for mobile payments, I think it's important not to lose sight of the fact that it can do so many more things. And those other functions are going to become critical to the well-being of the NFC ecosystem.

Here's why:

  1. In the US, the battle has broken out among all the players who make up the mobile payment ecosystem, just as I predicted last year (and in my first Mobile Wallet report from 2006). This could delay or totally derail the NFC payment world as these giants battle over the three- to five-cent fees most mobile payment transactions will generate.
  2. Handset vendors, point-of-sale terminal makers, application developers and merchants will be forced to wait-and-see which technology will ultimately win out. While they're waiting, they're not building compatible NFC devices or apps.
  3. HOWEVER, if there is some other reason to use NFC -- some reason other than mobile payments -- you can get a head start on making handsets, applications, and building  a profitable ecosystem.
So what sort of things could you do with an NFC-equipped smartphone?
  • Ticketing for public transportation
  • Movie and other performance tickets
  • Point-of-sale information (imagine if your product's mobile entire web site could pop up on a buyer's phone with a single swipe)
  • Location-based services such as search and navigation
  • Loyalty cards (such as your supermarket discount card)
  • Coupons
  • Membership credentials (gym membership, library card, even checking in at the doctor's office)
  • Personal information transfer (swap business cards by bumping phones)
It's time to focus on non-payment NFC applications and devices
It's time to get away from the focus on mobile payments and start thinking about ways to make NFC useful for everything else. That way the warring banks, mobile operators and handset makers will have to follow and we won't have to rely on them to lead in that direction.

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