The next killer app for NFC will not be mobile payments

The next killer app for NFC will not be mobile payments

With half a billion NFC-enabled handsets expected to hit the market in the next year, according to an ABI Research report released in March 2013, industry experts agreed that the major first step to broad NFC adoption has been accomplished. But discussion and debate continued as to what the killer app will be to get the technology to take off. Experts concurred in a recent meeting that the next NFC application might not even be mobile payments anymore.

Applications like wine tracking and device pairing that fulfill unmet needs and simplify activities may be the “world-winning NFC solutions,” according to Koichi Tagawa of Sony and Chairman of the NFC Forum. In another example, Tagawa noted that Japanese airlines using NFC can board a 450-person plane in only 15 minutes, as opposed to the standard boarding process for a 150-person plane without NFC in 40 minutes.

Other experts agreed that loyalty programs and offers are great first steps for consumers to use NFC technology.

Lynne Barton, VP of Marketing with Jamba Juice, which has been participating in the Isis Mobile Wallet pilots, said that NFC creates “more meaningful and personal conversations with customers.” She said that she “sees a future with NFC, but it will take consumers a little bit of time to get there,” adding that coupons and offers are “the gateway” to get consumers using the technology.

Lydia Martinez, Store Marketing Specialist at Whole Foods, concurred that “for the short term, loyalty and the value of the couponing is the gateway for people.” She said that the appeal of NFC is to help “drive brand and drive loyalty while giving customers a faster experience.” Martinez described an upcoming holistic marketing campaign where NFC-enabled coupons and loyalty will work with in-store displays and social media to promote local farmers and producers.

NFC should “create, communicate and deliver value to customers,” said Mohamed Awad of Broadcom and Vice Chairman of the NFC Forum. He said that creating value for NFC is about “simplifying with the way we act with the more and more sophisticated set of microcontrollers around us.” To this end, Awad described several use cases where organizations are communicating the value of products to customers by differentiating with NFC, including smart home appliances, interactive games, travel services, opt-in magazine ads, and even tombstones.

Other experts discussed mobile security features that could allow consumers to become more confident in using their devices for more sensitive transactions. Sebastian Taveau, Validity's CTO, described a vision of fingerprint biometrics providing consumers with a fast and secure way to unlock the NFC applications on their mobile devices. Citing that 90 percent of user-generated passwords are vulnerable to hacking due to being stored centrally in the cloud, Siva Narendra, Tyfone CEO said, “Consumers demand convenience and expect security.” Narendra unveiled Tyfone's new Connected Smart Card that enables the secure storage and use of multiple IDs that can be placed in a microSD, a key-chain, an iPhone case, or a wearable device.

But while speakers and panelists didn't reach consensus on what the so-called “killer app” for NFC will be, speakers conveyed the great potential for NFC including mobile payments in the longer term. When asked the question “Is NFC dead?” compared to alternate technologies such as cloud payments, Glenbrook Partners Consultant Allen Weinberg stressed that all these technologies are still in the early days and it is too soon to make judgments on what mobile commerce technologies will be the winners and losers. “At the end of the day, we don't have a widespread, commercialized anything yet,” he said.

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