We recently wrote a blog about the NFC market for mobile
payments and how this might take longer to materialise in the mass consumer
market than most were predicting. However, in writing that blog we got a few comments
from certain subject matter experts asking about other applications outside of
mobile payments, so here’s our response…
What is clear is that although there are literally 100s of
NFC pilots in operation around the globe, with most based around mobile
payments, there is now a growing diversification of other NFC-based applications.
Not just that, but with this diversification we are seeing the emergence of verticalized,
industry-based NFC applications. Indeed, innovative ISVs are now taking their
business process knowledge and applications expertise and applying it to mobile
solutions, using smartphone-based or card-based NFC systems.
These other application types include areas such as ticketing,
smart posters & tagging, security, time & attendance, etc. More importantly,
there is emerging an integrated NFC-based ecosystem whereby mobile payments are
linked to other NFC applications such as ticketing, smart posters and targeted
marketing, etc.
NFC-based Ticketing
Although NFC-based ticketing applications are often linked
to mobile payments, the ticketing aspect remains an important component in the
process. The basic idea is to enable faster processing of customers to avoid
queues and other hassles around ticketing, but it can also be able to reduce
the chances of fraud and counterfeit tickets. In such cases tickets are
purchased and then ticket-based bar codes are generated via an app, enabling
staff such as airport security, train inspectors, cinema/theatres attendants,
sport and leisure event organisers, etc. to rapidly check the validity of
tickets.
NFC Smart Posters & Tagging
Another key area for NFC use is in smart posters/local tags
to provide either web links to in-store promotions, for buying goods/services; offering
more detailed consumer information; or, direct links into business applications
for services. Indeed, consumer brands, merchants and retailers are now
recognising the fact that there are opportunities to use smart posters beyond NFC
for mobile payments. The concepts being developed mean that the traditional “point
of sale” interaction can be developed into a “point of interaction” whereby
they can engage with consumers based on couponing, loyalty programs,
advertising, digital gifting, etc.; and, critically, in a more targeted fashion.
NFC-based Security
A number of applications are also appearing for physical security
and access systems whereby NFC is used to authenticate and allow access to
restricted areas such as office buildings or residences. In some cases this
application area is being extended to much higher levels of ID and authentication,
such as National ID cards.
NFC-based Time & Attendance
Finally, there have appeared numerous examples of time and
attendance apps in use for field service workers. In such cases NFC tags are
linked to specific T&A apps to check-in and check-out field-based workers.
This typically helps companies to manage their workforce; to drive down the
cost of collating time sheets and visit reports; and, can even help scheduling
of jobs in real-time to accommodate cancelled appointments or new jobs.
Examples of Vertical
NFC applications:
Retail
Use of NFC in the retail sector, largely for mobile payments,
is well documented but more advanced applications are emerging, either by linking
mobile payments to specific marketing campaigns; or, by having smart posters
deliver targeted advertising or promotions to consumers. As an example, in the
UK (August 2012), DCM teamed up with Primesight to install 100 NFC-enabled
advertising posters/interactive panels in UK cinemas. Allowing for two-way
communication with the cinema-goer, brands will be able to tailor messages to
the user with NFC (and touch, Wi-Fi or QR embedding).
Transportation
In May 2012, France's Toulouse-Blagnac airport was announcing it was to be the first to pilot and enable
passengers to pass through the airport's checks, controls and gates using only
an NFC mobile phone. The project is being pioneered alongside RIM, Orange, SITA
and the airport authorities.
In the US, two of the busiest commuter rail services in New
York, the Metro-North Railroad and Long Island Railroad, announced in August
2012 that they are about to start testing mobile apps that allows passengers to
redeem ticket purchases with a displayed barcode. The smartphone app lets
customers use their credit or debit to make a purchase for any type of ticket.
After the purchase the electronic ticket appears as a barcode, which can be
scanned by a conductor.
In Zagreb, Croatia (January 2012) an innovative partnership
between Nokia and a number of nightclubs and participating cab firms is
allowing club-goers to tap and book a cab ride home using NFC-enabled posters.
Field Services (covering multiple industries)
One of the first commercial services in France (2010) was
from Orange Business Services who launched its ‘Mobile et Badge’ offering.
This was targeted at business customers to allow them to track the activity of
field service workers such as cleaners, babysitters, security and maintenance
staff. The service uses NFC tags placed at each location that the business
wants to track. When a member of staff arrives at one of these locations, they
select the 'I've arrived' or ‘I’m leaving’ option in the time and attendance
application stored on their NFC phone.
Government
A leading example of security-based NFC usage comes from the
UAE in the Middle East. In April 2012 the Emirates Identity Authority announced
it was working with mobile network operator Etisalat to develop a new version
of the United Arab Emirates' national ID card to allow both UAE nationals and
expatriates living in the country to store their ID on an NFC mobile phone.
Not only is Government involved in specific applications for
NFC but in some countries they are the driving force behind national NFC
schemes. For example in Singapore, in late August 2012, all three mobile
network operators (SingTel, M1 and StarHub) have begun offering NFC services to
their customers. This came after the Singapore government awarded a contract in
October 2011 to develop a national NFC infrastructure for Singapore. The consortium
of companies now includes the three carriers, transportation card issuer
EZ-Link, DBS Bank, Citibank, and NFC technology provider Gemalto.
Tourism
A good example of the use of NFC for tourism is the
development by the New South Wales Government in Australia of 37 interactive
walking tours around The Rocks, a district of Sydney. The idea is that tourists
can access a wealth of historic and local information regarding their chosen
interactive walking tour. With some of the
14 million visitors to The Rocks every year the hope is that tourists will use
the tours and spend more time (and money) in the district. Future plans include
extending the initiative to alert visitors to nearby shopping and eating,
special offers, follow social networks and make bookings or purchases.
Education
The University of San Francisco is currently piloting an
iPhone and Ingersoll Rand aptiQmobile key management application to allow
students access to their halls of residence. Students already have ID cards but
they much prefer the iPhone app as they always know where their smartphone is;
and, it brings higher levels of security than ID cards, especially if they are
PIN protected. The system works by students downloading the app and a secure
mobile key from their access control site administrator.
Conclusions:
In summary, NFC could have a major role to play for a whole multitude
of potential applications (not just mobile payments) but it still
requires a critical
mass of smartphone users to make the technology credible… and we’re not
there
yet; perhaps if the iPhone 5 arrives with NFC we'll be one step closer (except we now know Apple didn't integrate NFC into the iPhone 5!).
Indeed, NFC-enabled smartphone penetration remains low albeit growing.
However
there are other, more critical hurdles ahead to mass market adoption of
NFC-based
applications. These typically centre on negative perceptions of the technology,
particularly with consumer worries about mobile security, infringements on
privacy and businesses just knowing too much about them and their preferences.
Just like in the early- to mid-2000s when business users were worried about the
intrusive and 24/7 nature of smartphones and push-email, it just takes a while
for the technology to become pervasive.
Note: Tell us what you think. Do you agree or disagree with our commentary? Have we missed something obvious? We'd love to hear from you!
Do you need some insight in a specific area? If so, contact us now on:
Email: geoff.fitzgerald@tech-research.co.uk; Tel: 07710-573688
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