Near Field Communication (NFC)
Mobile phones are at the mature phase of the product lifecycle causing manufacturers to search for new ways to squeeze out profits. One method is to add new functionality (which requires investment further squeezing profits). Another method is to provide add-on features an action that allows standardization, coordination,& partnering with other players in the mobile phone eco-system. The add-on feature may be in the form of technology for the manufacture or new services for the consumer.
What Does It Do
Near Field Communication is a technology that enables new services for the consumer via their smartphone. NFC is a combination of three services RFID tag technology, contactless payment cards, and inductive-coupling. It surpassesBluetooth because it does not require pairing. Due to the limited range it is ideal for secure transactions like contactless payment card, and it has a much broader range of applications than QR codes.
How IT Works
The science is like other RFID technology. The near field process creates a magnetic field “loosely coupled inductive circuits” to share power and data over a distance of about 1.5 inches.
NFC can operate in three modes:
- Reader/writer mode: A reader/writer can collect and write information on a smart tag. “The tag is essentially an integrated circuit containing data, connected to an antenna.”
- Peer-to-peer mode: Two NFC devices can exchange data between each other.
- Card emulation mode: An NFC device appears to a reader like a contactless payment card or contactless transportation card. On NFC phones, the SIM is being extended to act as the Secure Element that can hold other apps such as payment cards.
How IT Applications
Public Transportation: this technology is well-suited for public transport where the ability to quickly read ticket information has made it a staple in countries like Singapore Japan and the UK.
Smart Objects: NFC can have similar applications as bar codes do now. You can put one on a poster and let pedestrians scan it on their phones for more information. But being able to add more information to any object by integrating a tag has led to some interesting applications that go far beyond billboards.
Payment Card: Google has been using this technology in Google Wallet.
Current Business Impact
The world’s leading financial card companies, mobile phone operators, manufacturers, chip makers, consumer goods companies and others are intensely interested and investing strongly.It is rumored that Apple is integrating NFC in its iphone 6.
NFC-enabled mobile phones allow consumer payment methods such as credit, prepaid and stored-value. This has been successful in Japan where over 90% of transactions occur with NFC mobile phones.
Location based marketing trends relies upon digital placed media Digital place-based (DPb). NFC enabled smart poster – (a poster with a NFC tag on it) will register consumers as the pass by it. The marketer will know exactly where & when a potential consumer is within proximity of the digital media. As importantly know the marketer knows its branded messaging was delivered and even has the potential for advancing a relationship if the consumer interacts with the media.
Tagging in particular fits into the trend towards the internet of thing where in inanimate objects will be connected to the internet. Marketers can provide a better shopping experience for consumers, affording the opportunities to do real time research while capturing this audience through digital place media.