As the battle continues for dominance of the mobile payment market the inclusion of fingerprint verification as seen in the iPhone 5s means this technology will likely become mainstream. Importantly although Apple have locked this functionality into their ecosystem, Samsung’s decision to initially pair with PayPal will mean consumers can using fingerprint verification for payment at a wide range of online retailers. This has far more scope and no doubt PayPal will be eying this up as an opportunity to start managing more payments in store via their Beacon technology.
More interesting will be whether Samsung opens up its fingerprint verification technology for use by other developers, notably Visa and Mastercard whose primary focus is on NFC. Following the inclusion of Host Card Emulation (HCE) in Android KitKat 4.4 NFC payments are no longer restricted by carrier support which opens up opportunity for more competition and innovation.
Mobile World Congress had a big emphasis on security this year which shows that the mobile industry is increasingly fixing its sites on offering a mainstream solution for mobile payments. It is becoming clear that although consumers will still have just one or two bank accounts for everyday purchases how they pay will be extremely diverse. Paying in your local supermarket via NFC, paying at Starbucks using Bluetooth (Beacon), paying online using your credit card details; what the technology is doesn’t matter as long as it’s quick and simple to use.
No payment solution is perfect for every situation, each having their own benefits and draw backs and therefore the task facing the mobile industry is to get the right payment solution in front of consumers at the right time, increasing the ease and simplicity of payments and ultimately drive sales.
It is often assumed that NFC and iBeacon are competing technologies and that in time one will cancel out the other. In reality whilst they both connect the physical and digital worlds they have fundamental differences in how they work and the type of interaction offered.
NFC and iBeacon use different technologies for communication, NFC using near field communication as found in a contactless bank and transit cards (such as the London Oyster Card) whilst iBeacon uses BLE (Bluetooth low energy) which is commonly found in wireless headphones or used for transferring files between phones. Importantly the technologies have very different wireless ranges, NFC being typically 1-5cm and BLE being up to 50m.
The wireless range is very important as it dictates how the technology can be used. For example if you wished to validate individual concert tickets, using iBeacon with a 50m range and a cost of $20+ each would be useless however using NFC which can be highly location specific and costs as little as $0.20 per tag is ideal. Conversely if you wanted to push a notification to download an app to everyone in a department store iBeacon offers a much more practical solution.
BLE and therefore iBeacon is currently supported by all top 10 mobile manufactures which is an extremely attractive feature however like NFC consumers must have the setting turned on in order for it to work. By comparison NFC is currently supported by 9 out of 10 mobile manufacturers with the exception being Apple. Whether or not Apple will include NFC in the future is a subject for a separate blog however the number of NFC phones is increasing rapidly and offers a much slicker interaction than offered by the older QR code technology.
If Apple does not support NFC in likelihood iBeacon will become a better option for marketing as it is a one size fits all solution. NFC however will still be of value working alongside QR codes in highly location specific marketing solutions such as individual items on a shop shelf. Further to this NFC will hold value where the consumer has the NFC tag, for example a concert ticket, payment or transit card. iBeacon's simply aren't available at a price or in a format where providing each consumer with an iBeacon is practical.
By being highly location specific NFC marketing must be intentionally engaged with. For example if a restaurant had an advertising poster to 'tap and receive a discount voucher' the consumer would need to make the choice to engage. By comparison iBeacon is a more aggressive marketing strategy as the message would be pushed to every Bluetooth connected device in range. Both strategies have their place and it will depend on the individual campaign which is most appropriate.
NFC is already integrated within payment terminals of most major retailers due to the introduction of contactless bank cards from global payment providers such as Visa. NFC payments from a mobile phone are the next logical step and whilst no one solution has established itself the introduction of Android KitKat 4.4 is set to change that. Importantly NFC payments are not just supported by the majority of mobile manufactures but also by the payment industry. Payments is an area Apple have little influence in and therefore their support is far less important.
iBeacon will allow consumers to pay wirelessly in store though the technology is too young to tell if this will happen. To use iBeacon a customer would need to download an app for each retailer and although it could be great for a supermarket where most are regular shoppers in the vast majority of cases the standard retail model of going to a checkout is far simpler and likely to be favoured by consumers. Another thing to consider is will retailers trust consumers to make purchases without visiting a checkout? If you stood by a clothes rail, went on your phone for 30 seconds and walked out how would staff know if your purchase was legitimate or not? Add to this retailers also would lose out on valuable face to face interaction with their customers and the proposition is not such an easy sell.
NFC and iBeacons will likely work alongside each other in the long term with NFC offering the less aggressive marketing option of the two. iBeacon has huge marketing potential and it's compatibility with devices from all major mobile manufacturers means it will likely become the marketing tool of choice. That said both technologies are about a lot more than marketing !
NFC still offers the most secure and practical payment solution. It's close proximity means it offers greater security for both the consumer and retailers and it sits much more neatly into the current retail experience. It is also worth noting that NFC is much more established and has been used globally in contactless payment, transit, security and loyalty systems for years. In these instances the consumer requires an NFC tag in a small unpowered format such as a card or sticker; something iBeacon will not offer in the future.
Despite some marketing cross over these technologies have fundamentally different properties and uses cases and by understanding the differences the right option can be chosen.
A question we are frequently asked is what is the best way to encode NFC tags ? Typically there are two options, using an NFC enabled mobile phone or a USB NFC reader/writer.
For most the answer is an NFC enabled phone and there are many free or low cost apps available on all NFC supported mobile platforms including Android, Windows Phone and Blackberry. Apps offer the best solution because they are easy to use and importantly handle details such as data formatting behind the scenes.
RapidNFC offers a range of NFC tags specifically designed for use with Trigger. We recommend these great products !
Task Launcher NFC Pack - Contains a total of 12 multi-coloured 29mm gloss finish NTAG203 stickers and 6 NTAG203 hang tags with the RapidNFC trademark NFC logo. Six Colours - Blue, Red, Green, Black, White and Yellow.
Mini Twelve Pack NTAG203 NFC Stickers - Twelve multi-coloured mini size 29mm gloss finish NTAG203 stickers with the RapidNFC trademark NFC logo. Six colours - black, white, green, red, blue and yellow.
Hang Tag Six Pack NTAG203 - Six NTAG203 hang tags with the RapidNFC trademark NFC logo. Six Colours - Blue, Red, Green, Black, White and Yellow..
Yesterday saw the release of the new Google Nexus 5 and more importantly the release of Android 4.4 KitKat. We say more importantly as while the Nexus 5 looks to be an undoubtedly great phone the new release of Android will in time be available on all Android phones and shows us where the world's largest mobile operating system is heading next !
A key upgrade to Android 4.4 KitKat is that it allows NFC host card emulation (HCE) without the need to access a secure element, or in more simple terms, any app on Android can emulate an NFC smart card and therefore will allow Android phones to be used for payment, loyalty cards, access, transport passes and a whole host of other services.
Previous versions of Android require applications to access a secure element in the NFC chip when making NFC payments. This meant mobile carriers only supported the payment applications they wanted to leaving many apps such as Google Wallet without support. Android 4.4 KitKat removes that obstacle.Perhaps more importantly this move further establishes Android's support for NFC as the future of mobile payments. Android now accounts for a staggering 79.3% of the global smartphone market so this backing is very important indeed !
As a company at the forefront of delivering NFC tags and products we frequently meet with many of the world's largest advertisers and brands. No matter what the meeting is about one question always comes up, 'Just how many NFC smartphones are there ?'. In this blog we will try to answer that question.
There are no set figures for the number of NFC smartphones however there are key indicators that offer an accurate estimation of the number of NFC phones and whether that total is significant by comparison to the overall smartphone market.
Research from established sources serves as an important indicator of how many devices are in circulation. These are the two most reliable sources we have found.
1. ABI Research, one of the most established technology market researches in the world, has predicted that 285 million NFC devices will ship in 2013, this up from its prediction of 102 million for 20122. The report also confirms that nine of the top ten OEMs (original equipment manufacturers) have commercially available NFC handsets.
2. Frost & Sullivan, another global researcher has added to the ABI research by predicting 53% of phones will be NFC-enabled by 2015, estimated at 863 million units3.
These figures clearly show that NFC is becoming an increasingly available technology and that its growth is accelerating. As growth continues it creates opportunity both alongside and separate from mobile payments to offer consumers better interactive and digital experiences through their mobile phone.
The number of NFC enabled smartphones is only one part of the jigsaw as unless NFC is accompanied with consumer awareness and ultimately services that make the technology genuinely useful it is without value. In 2013 this has started to gain real traction.
There have been a number of key indicators including global promotion by leading payment vendors such as Visa but more interestingly by out-of-home advertisers such as CBS Outdoor, Clear Channel and JCDecaux. The growth we have seen has been less associated with payments and more with experiential and digital marketing as the wider scope for NFC is understood and utilised.
1. Create your own Christmas video... we like JibJab !
2. Share your favourite Christmas tunes by linking to a Spotify or Dropbox playlist.
3. Linking to a company website or promotion.
4. Link to your favourite Christmas website. We like Your Christmas Countdown. Quick tip - make sure the website is mobile friendly.
We have teamed up with Maplin, the UK’s largest specialist retailer of consumer electronics, to stock and retail RapidNFC NFC Retail Packs. The rollout will take place in over 200 Maplin stores allowing shoppers to purchase NFC tags in high streets across the UK.
The initial rollout includes the Multicolour Mini Stickers Retail Pack that contains 12 NFC sticker tags. Each NFC tag contains the NXP NTAG203 chip ensuring compatibility with all NFC enabled mobile phones and can be programmed using free and low cost apps available on all NFC supported platforms including Android, Windows Phone and Blackberry. By tapping an NFC phone to the tag users can automatically update mobile settings, launch apps or view content online.
We are really proud to be the first company to bring NFC tags to the high street as the NFC industry continues to grow and expand.
So we, like everyone in this industry, watched the release of the new iPhone with expectation and anticipation. Like it or hate it, every iPhone release is great for creating discussion and comment. Will the 5C sell without hurting the 5S margins ? Will it sell at all in China ? Why did they release a coloured phone when their target market will instantly wrap it up safely in a case ?
And why didn't they include NFC ?
As far as the NFC industry is concerned, the question is ultimately what impact the exclusion of NFC has on the NFC industry but this can be seen from two subtly different perspectives. The first is the effect that an iPhone without NFC has on the usage growth rates and the second the relevance of the iPhone to the mobile market in general and therefore the effect on both the NFC usage growth rates and long term success of NFC.
Let's tackle the second point. Will this latest release halt the march of Android and the potential of the new Nokia/Windows alliance ? (We can hear the laughing on that last comment but don't underestimate the brand/marketing power of Nokia/Windows if they can get it even close to good). Only a fool would bet heavy against Apple but we still aren't sure they are genuinely hitting the targets. People bought the iPhone (and iPad, iPod, etc) because it's desirable. That's a loose term and can mean many things but it's the reaction when people see it or touch it and say 'I want one'.
And that's where the new features in the 5S are good but not home run territory. A more powerful processor ? Techies will buy Android - anyone else probably doesn't know or care. A better camera ? Important but everyone has a 'better' camera with every release and for a lot of people, like it or not, more megapixels sell because the rest is subjective.
So, the big one - the fingerprint scanner. Any junior ad exec will tell you that you don't sell features, you sell benefits. The fingerprint scanner is a feature. Slightly faster access to your phone and improved security on iTunes purchases is the benefit. Thin. Very thin. And that's if it works reliably.. OK, so there's also the argument that it might help prevent theft but we'd be surprised if your average pickpocket will put the phone back into your pocket when they realise there's a fingerprint scanner on the phone.
It has been mentioned that the new gold colour is probably the strongest marketing/sales pitch. And that should tell you something.
As for the 5C, that could go either way. The launch of a cheaper model might be a sales success akin to the Porsche Boxster. Or people might not see it as a new product like the Boxster and just last year's technology in a plastic case. The jury will remain out on that one but it's worth mentioning that the price of the Boxster is 52% of a 911. The 5C is 86% of the 5S.
The iPhone is unquestionably still a beautiful product and a masterful piece of product design but is it as desirable ? And that will ultimately determine whether this time next year the iPhone carries the relevance that it once did.
To return to the first point. Will another iPhone without NFC slow the current growth rates. The answer is no. Sure, nothing could have raised market awareness like NFC in the iPhone and it's inclusion would have accelerated the growth without question - especially within the marketing/advertising sectors. But it's lack of inclusion isn't going to slow the general trend which has been solidly building over the last few years.
The reasons for this are numerous, but not least of which is that NFC is a feature that makes using the phone better rather than a feature that makes unlocking your phone better. And that's strong.
We have said this before - we think that NFC would work great in an iPhone and that Apple's army of creative and brilliant App developers would have created some wonderful applications with it.
We can't help but feel though that with every iPhone release it's Apples's loss rather more than the NFC industry.
The time has almost arrived for the next iPhone, Apple has sent out the invitations and as always they are slightly cryptic and leave plenty to the imagination. Their tag line 'This should brighten everyone's day', displayed on a multi-colour background makes it fair to assume the new iPhone's will be available in a variety of colours. But for Apple's sake let's hope this isn't the only trick up their sleeve and we doubt it will be. Rumoured features are numerous but there is only one we are interested in here, NFC.
Despite support for NFC by nearly all major phone manufactures and payment providers it is clear that inclusion by Apple would make a big difference. It represents that last piece of the jigsaw that puts NFC everywhere rather than just somewhere. With this in mind let's weigh up the most likely outcome...
1. NFC is the worldwide established technology for mobile payments with support from major payments providers including Visa, Mastercard and payment terminal provider Verifone. As one of the world's leading mobile manufacturers and technology companies it seems improbable that Apple would shy away from mobile payments. Including NFC in the iPhone would allow for mobile payments even if it isn't ready to be released just yet.
2. NFC is commonplace amongst nearly all competitor handsets and this has been well publicised, notably in the popular Samsung advertisements. As a relatively simple technology to include it could leave iPhone users wondering why they still cannot access the many NFC services on offer ?
3. Apple has such a strong developer base they could take NFC, something primarily associated with Android and steal the lime light. Apple have always thrived on taking existing ideas and bringing them to mass market, they didn't invent personal computers, digital music or smartphones, but they were the best at it !
1. It is possible that Apple will stand back from mobile payments and instead focus elsewhere. The mobile payments ecosystem is highly complex, requiring cooperation throughout the global payments network which has led to a slow uptake of the technology. It would however seem odd to withhold NFC from app developers despite this.
2. Apple is still waiting for the global infrastructure for contactless payments to mature, after all there is no point promoting as service to your customers that they cannot use.
3. Form over function. NFC will not work through metal which is at odds with their preferred aluminium design. The HTC One overcame this problem by installing the NFC chip behind the camera however so it can be done.
New NFC products, comments, general views and other opinions about NFC tags, NFC phones and all things NFC !Tweets by @RapidNFC