Tags

, , , , , , , ,


NFC ChipAs mobile devices proliferate into every nook and cranny of our lives, I still maintain that we’re barely scratching the surface of mobile capabilities as we enter 2013.  The possibilities are enormous for mobile technology and I think we will see several innovations come to life in the US over the next several years.

Some of these innovations are already in use today but are not widely adopted.  Others are widely adopted in Europe and/or Asia while the US lags for various reasons.  Most of those reasons are based on irrational fear or competitive positioning by companies trying to exclude technologies from gaining acceptance in the marketplace.

Near Field Communications (or NFC) is a low-wattage data transmission technology that works when devices are in close proximity.  It’s perfect for sending small amounts of data in a secure manner between two devices.  The transmission rate is below .5Mbps but avoids the “pairing” step of its faster cousin, Bluetooth, and it has less range than it’s parent, RFID.  For applications that require a faster data transfer speed, NFC can also be used to initiate a faster non-NFC connection between two devices to share large files such as audio and video.

NFC is currently more popular in Europe, and growing with over 40% of mobile transactions predicted to occur via NFC by 2015.  In China there are already 169 million users of NFC technology when purchasing goods and services such as transit rides.  Device manufacturers such as Samsung have released technologies such as TecTiles which, along with a simple app available from GooglePlay, allow users to create NFC tags to perform a variety of automated actions.  One of my favorite examples is creating a TecTile that puts a phone into “driving” mode automatically when a phone is placed on or near the tag in a vehicle.  This tag could be programmed to turn on Bluetooth for pairing with an in-car device, activate a navigation app, turn on voice commands and – best of all – disable texting.  The TecTiles can be placed on just about any surface and can perform myriad actions:

  • Place a tag on a business card to allow easy creation of your contact information on another device.
  • Place a tag on a desk at work to have calls automatically transferred from your mobile to your office phone.
  • Tag a room to reset your wifi-enabled thermostat to your preferences when you enter a room.

Best of all, these tags can be reprogrammed at will.

I’ve heard a few people ask why we need NFC if we have QR code technology and that’s a good question.  I regularly use an app called LevelUp that allows me to pay with my mobile device in a certain diner near my home.  It’s fast and convenient – and proprietary.  To me, it’s also proof that mobile payments are a great idea and that we will eventually migrate to a system that is more standardized and based on a common, reliable and secure technology.

So why does the US lag this advance in technology?  Two reasons:

Manufacturer Myopia:  Come on Apple.  Passbook, as it is today, isn’t going to be a real competitor with technologies like this in the long run.  It’s a passive technology — perhaps PassiveBook would have been a better name.  Don’t get me wrong, I use passbook for several things but it’s a one-way data relationship.

A recent survey conducted by Charles Tran found that 68% of smartphone owners answered, “no” when asked, “Would you like to replace the cash you carry with a mobile wallet?”  Of course most people aren’t going to run toward a change like this. Remember, Steve Jobs was famous for downplaying consumer research saying that Apple should design products people don’t even know they want yet.” So instead of forcing users toward an Apple app, they should leverage new technology and make it easy for iOS platform developers to develop for it. I sincerely hope Apple isn’t taking the “’we’re high’ road” like they did with Apple Maps.

Technophobia:  Here’s where the fear factor comes in.  I commented to a friend last week that more quick-service restaurants should use LevelUp or similar technology while waiting for NFC to proliferate.  They responded, “But what if you lose your phone? Someone could run up charges.”  When I reminded them that the same problem exists with a credit card and cash, they said, “Wow, I never thought of it that way.”  I understand that technology can be daunting and that there are many issues with some technologies that can create horrendous data breaches and lead to identity theft.  Identity theft can also happen when a credit card is handed to a waiter at a restaurant.   But ask yourself what’s easier?  Trying to remember the sensitive information in your wallet that was stolen, or deactivating your phone from your computer, your tablet or by calling your mobile provider.   This is the same sort of fear, uncertainty and doubt that crowded the minds of would-be eCommerce shoppers in the early days of the Internet.  It will take time and a concerted effort from manufacturers, mobile providers and application developers to educate consumers on the relative safety of technologies like NFC.  We should also look to Europe as they have very stringent privacy directives that would make sensible company cringe at releasing something on an iffy technology.  NFC passes the test there and it should here, too.

So, by 2015, I think we’ll see additional adoption of NFC by device manufacturers and begin to see retailers and services businesses like mass transit, movie theaters, theme parks, and others implement the necessary hardware on their side to make this happen.

So, what do I think we’ll see in the next few years?  For starters, either NFC or an equivalent technology will begin to gain de facto acceptance for the bidirectional transfer of data between devices within close proximity.  This will enable not only simple transactions such as payments, but will also allow a user’s mobile device to contain their life preferences and have the environment around them adapt to an individual’s preferences or even the collective preferences of a group.

There is a tremendous range of innovation possible when NFC transcends not only the acceptance barrier, but especially when it transcends the “intended use” barrier.  Financial transactions are the tip of the iceberg and there is so much below the waterline we only begin to fathom the possibilities.