A recent survey of U.S. consumers by Mastercard indicates 62 percent of U.S. mobile phone users would be open to using their devices to make purchases. Mastercard had a little fun with its survey and found that 45 percent of women, versus 34 percent of men, would rather have their phones than their wallets surgically attached so they'd always remember them when leaving home. If Near Field Communications is as transformative as some speculate, it will make our mobile devices an even more valuable appendage.
Much of the conversation about NFC revolves around the enabling of mobile payments and the cooperation needed among players to make the tap and pay option widely available. There was news in February that many international network carriers are driving toward standardization. More recently the three major U.S. carriers, Verizon Wireless, AT&T and T-Mobile announced they will team up with Mastercard and Visa in the ISIS mobile payments venture.
New Blackberry and Android offerings are equipped with NFC, and there has been much "will-they-or-won't-they" speculation about whether it will be in the next iPhone. John Paczkowski, of All Things Digital, recently wrote in his Blog, that Bernstein Research analyst Toni Sacconaghi, who believes Apple, will forgo supporting NFC on its iOS devices until consumer adoption is certain and it's reached a critical mass with merchants. Sacconaghi went on to say, that currently, very few U.S. merchant locations support NFC-based payments, which means the ramp-up to broad NFC infrastructure will likely be a long one.
"NFC-based mobile payments require NFC-capable POS terminals," Sacconaghi wrote. "Only 51,000 retail locations support contactless payments (per VeriFone's 10-K); given that First Data alone deals with 4.1M merchant locations in the U.S. this suggests current penetration of just over 1 Percent of merchant locations."
Sacconaghi concludes that clearly, a higher critical mass is needed before payments would take off.
Amidst this newsworthy backdrop, there is an opportunity to take a step back from the ecosystem and technology and think about the person doing the tapping. Andrew Berg, writing for Wireless Week, believes it will be customer-focused benefits other than payments that will lead the way in orienting people to NFC and establishing the trust needed to gain a wide acceptance network of mobile payments.
NFC will facilitate a range of essential consumer activities. Right now most of the NFC trials in the U.S. involve payments. At the same time, Google is testing the use of NFC in certain cities for its Places local recommendation service. Hotels.com and The New York Times will be delivering exclusive mobile content and offer smartphone application downloads in a test of the out-of -home service mTag in San Francisco.
Most relevant to our industry is the targeted discovery it will enable. A tap of an NFC enabled phone can trigger offers and informative content at the point of decision, trigger an application download that promotes loyalty and ease the exchange of information. These are just some of the customer benefits that NFC will bring one day to the environment of kiosks, in-store merchandising and digital signage.
When all of the pieces are in place, NFC is a technology that can facilitate the relationship between the brand and the consumer. Consumers will decide if they want to be marketed to in this way. If they perceive real value, their early experiences will pave the way for closer engagement.
By 2015 iSuppli, a technology market researcher, estimates that 30.5 percent of handsets worldwide will be equipped with NFC. Will the readers of this blog incorporating NFC into their solutions help pave the way for consumer acceptance? Are we focused in on the Consumer Engagement possibilities yet? What do you think?
Ron Bowers and Frank Mayer & Associates are recognized for their expertise of the in-store merchandising marketplace. Their creative insight has developed leading edge point of purchase displays, digital signage, kiosks, mobile, and self-service retail customer experiences.