This is the first part of an interview with Bert van den Bos, owner of Connected Loyalty and Startupbootcamp NFC&Contactless mentor. At the moment, he focuses on building an infrastructure for companies to deliver NFC services, so that it becomes easy for consumers to use. During the interview he discusses his predictions for NFC technology implementation and security.
Which, in your opinion, is the market with the biggest potential for NFC and contactless interactions (both industry and location wise)?
Loyalty programs of retailers!
Considering the fact that the Netherlands is one of the countries that have the most loyalty programs (on average, 25 loyalty cards per person), the Dutch market is the best market to demonstrate the potential of NFC. Obviously, the biggest potential resides where most people live, so I would argue that Asia is the best place to start, since people there are more willing to adopt new technologies, especially with a fun factor.
What kind of value, other than purchasing, can be given to the concept of mobile wallet?
Loyalty, access, digital signatures, identification, public transportation, parking, authorisations.
Will NFC mobile payments drive non-payment use cases or will it be the other way around?
Without any doubt, this will be the other way around. Banks and/or other financial institutions may push for contactless services which will push NFC readers to the shops, but is a retailer interested in linking its brand to that of the bank? Only small retailers may be interested, not the big ones. This is especially true if the transaction between the retailer and the consumer is stored and can be tracked – perhaps to be sold for other purposes than intended by the retailer and/or consumer.
The retailer is interested in combining payment with its own loyalty program. Consumers need a solution for all the plastic cards they have in their wallets (25 on average, in the Netherlands). Retailers are less than average successful in implementing loyalty programs in the Netherlands, since the wallets of the consumers are packed with cards or have none, as the owner denies the plastic cards when offered to him.
Retailers, as well as consumers, have a serious recognisable problem with their loyalty programs, whereas contactless payment does not. Providing a solution for this problem will drive the general acceptance of NFC services and from there on other services like payment, public transportation and identification can be supported and provided.
Payment services will be successful but remain niche implementations.
How effective are QR posters and how frequently are they used, based on geographical location?
QR posters and codes are very effective as such. However, the time it consumes for the consumers to use the QR-code is significant and this is a downside. Furthermore, all QR-code based transactions can be tracked by the party enabling the consumer to execute on the QR-code; like many of the current NFC implementations we have discussed so far. NFC is easier and faster to use. QR-codes are very cheap, while NFC is expensive. But walking in cities, I do not see so many QR-codes as it could be possible. They are not frequently used.
What are the advantages and disadvantages of NFC in contrast with other wireless technologies?
While two NFC devices are communicating, listening to that conversation is very difficult because of its implicit technology.
In the future, is NFC the solution for payment on smartphones?
Yes! All NFC services will end up on the smartphone, as this is the most convenient way for the consumer. Today, many people associate money with something that needs to sit in the wallet, not on the smartphone. During a trial period last year, we asked users of a loyalty program and a payment service – which was on a Samsung smartphone – what they would prefer if the service would be rolled out: a plastic card as the carrier of the eCards or a smartphone. 70% answered: plastic card.
What does NFC mean for consumers?
Easy of use. If an open, transparent and non-discriminatory infrastructure exists to enable Service Providers to provide their NFC service to the consumer, it will be even easier for the consumer, as they do not need to carry around many NFC cards.
Reliable. One cannot “listen” to the on-going radio communication during an NFC transaction.
Stay tuned for the second part of the interview!