Most of the noise surrounding NFC has been about contactless payments. One of the big discussions within the NFC industry is what the real ‘killer app’ for NFC is outside payments. Might the focus now start to fall on nfc authentication and nfc identification ?
It’s generally accepted that NFC marketing isn’t likely to happen in any substantial way until Apple’s iPhone supports the scanning of NFC tags. And it’s not clear that this is going to happen in the near future. Indeed, it’s not clear whether it will happen at all. However, NFC tag scanning is built into every other smartphone now and because of it’s now standardized use in payments, it’s not likely to be removed in the short-medium term.
It could be argued that Apple have looked at the use cases for scanning NFC tags and come to the conclusion that it’s limited. Limited to the extent that it’s not going to convince many people to buy – or not buy – a phone because of this.
So let’s look at the big non-payment mobile NFC spaces : ticketing, marketing, product/object/person identification and product/object authentication.
Ticketing is a no brainer as it’s really just an extension of payments. To an extent, it’s a replacement of technologies such as QR codes. The technology is active to active (no passive NFC tag) and there’s no question it will be a substantial market as replacing paper tickets with mobiles is clearly the way to go.
However, there are difficulties. For example, how you provide for people that can’t or don’t want to use their mobile. Replacing paper tickets with electronic tickets for those people is expensive. There’s also some debate about how efficient it is. Anyone who’s stood behind someone attempting to pay with their mobile phone will know what we mean. A queue of people attempting to get their phones ready for an NFC tap is not going to be fun. Taking the phone out of this and using smart tickets is an option. They are more difficult to fake and quicker at the gate. But the costs rarely make sense particularly as print-your-own tickets is so cheap. However, for options such as transport (rail, airlines, buses, etc) then most people expect to see some slow but steady progress.
Marketing we’ve already looked at. We would argue that NFC marketing isn’t likely to take off until Apple allow tag scanning. Until then, it’s likely that we’ll see the odd marketing campaign as a ‘trial’ but little more.
Object identification and object authentication is where it starts to get interesting. Clearly, QR Codes are the leader here primarily because of cost. ‘Scan for more information’ or ‘scan for the user manual’ allow easy access to important information. However, QR Codes are seldom seen on FMCG goods or food packaging etc. Many industry watchers consider this to be a substantial NFC growth market – perhaps _the_ substantial growth market for mobile NFC outside payments/ticketing. We’d agree.
NFC has a number of benefits when used for object/product identification/authentication. It’s user friendly, seamless and reliable. Adding tags directly into products either so end users can quickly scan can be very effective. Additionally, tags can also be hidden inside products to be scanned only by those who know they are there. NFC authentication ranges from cheap and easy (such as a simple encoded ID linking to a web page or an App reading the chip UID) to cheap and reliable (such as reading the chip UID, checking the tag is genuine). Tags can be linked to marketing as well as checking the product details and/or authenticity can give a reason for a user to scan the tag and enables the manufacturer to connect with a customer post-purchase.
Product NFC authentication has anti-counterfeit benefits, user contact benefits, customer support benefits and relative to most product costs adds very little. Are we likely to see NFC tags on FMCG goods in the near future ? Not likely, but there’s a whole range of other products that would benefit.