NFC is here, now brands must start tapping it up
It’s official: NFC has landed. No, not the Tyneside football club - mobile contactless payment, the technology that allows users to pay for items at the checkout by a swipe of their smartphone.
The race to be the first mobile operator to launch the service in the UK has been brewing for well over a year but today (20 May) Orange pipped its rivals to the post.
Orange’s launch is likely to take much of the fanfare away from O2’s announcement a day earlier about the partners it will work with to launch NFC in the second half of this year.
But despite today’s launch and the growing hype around NFC, mobile contactless payment is unlikely to have mass penetration in the UK for some time.
For a start, the Orange service is currently only available on Samsung Tocco Quick Tap, which only became available today.
Although other handsets are set to follow, most users are currently locked into lengthy contracts, meaning they are unlikely to get their hands on Quick Tap smartphones for months.
And while there may be more than 50,000 NFC-enabled terminals already installed in retailers and restaurants such as Pret A Manger and Subway, there has still been little education to staff and consumers as to how to use them to make payments. And 50,000 terminals is hardly indicative of the amount of payment points and tills currently available on the high street.
Which means brands have plenty of time to prepare themselves for the opportunities NFC can offer when it becomes widespread. Invest in mobile contactless payment now and they will not be left behind when it becomes commonplace to pay for your lunch with your phone.
The “mobile wallet”, as O2 deems it, can harbour far more than just a means for payment.
The mobile wallet could in future take away the need for ever having to carry a physical purse again. The technology could connect loyalty, travel cards and ticketing services.
The mobile web also provides easy access to price comparison websites and brands’ digital offerings, which users are already viewing in-store.
With mobile payment, brands have the opportunity to contact their customer when they are making their purchasing decisions. NFC has the potential to be the new POS.
When a customer is buying a lipstick at the counter, a cosmetics retailer could use mobile marketing to pop up at the payment screen to inform them of their discounts or new products.
After payment, brands could get in touch to thank the customer for choosing them and point them towards their website or social networks so that they can get more ideas next time they choose to shop. Or perhaps Amazon-style, “if you bought that, you may like this”.
It will take a while for consumers, mobile operators, retailers and payment providers to get their heads around NFC. Today is just the beginning and there will no doubt be hiccups, adaptations and innovations along the way.
In recent months many mobile manufacturers and brands have told Marketing Week about the drive for a contactless Olympics.
Which means brands have just over 13 months to firm up their NFC strategies and be part of one of the most exciting developments in location-based marketing since the SMS.