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Envisioning a World With NFC-enabled Phones

The technology promises a range of benefits to businesses and consumers, as well as a few challenges.
By Vivek Khandelwal
May 31, 2010The basic goal of many new technologies is to make life easier, and Near Field Communication (NFC) is no different. NFC is essentially a proximity radio frequency identification technology. It enables a class of applications, such as mass-transit commuter tickets or financial transactions via contactless cards, in which consumers can interact with a product or service when they are in its proximity. Currently, NFC technology is undergoing various trials around the world. So, just where are people looking to implement the technology? One device is the mobile phone.

Business Benefits
By virtue of it being a connected device, a mobile phone embedded with NFC technology can enable businesses to connect with consumers, opening up new applications not previously possible. Applying NFC to public transportation ticketing, for example, can allow a commuter to purchase tickets online and have them provisioned on an NFC phone over-the-air (OTA), thereby enabling the handset to function as an RFID-enabled train or bus ticket. With knowledge of which train or route is being taken, the transit operator can then send related information to that individual. Meanwhile, coupons, promotions and advertisements for various products and services could be transmitted to the commuter's phone, taking mobile marketing to a new level. Similarly, in a payment application, a bank or other financial institution could provide customers access to other banking services.

NFC enables businesses to not only connect with customers, but also gather valuable market research data regarding those customers—their location, interests and demographics. For instance, imagine if a consumer used a cell phone to scan an NFC RFID tag on a pair of jeans in a shopping mall, in order to authenticate the product, search for lowest pricing on that item in his or her area, or obtain more information about it. After reading the tag, the phone would download the requested product information from the manufacturer's Web site, providing the company with data regarding the type of jeans in which customers are interested, and then correlate that information with sales data to understand customer preferences by demographics, location and so forth. This is very powerful real-time information, enabled by NFC technology.

Consumer Convenience
The benefits of NFC-enabled mobile phones are not just limited to businesses; consumers stand to benefit as well. In the transit application, for example, beyond the convenience of having a ticket purchased online provisioned on the phone OTA, commuters can dynamically buy upgraded or additional rides via the mobile devices. Moreover, the commuters can also get train route information and status updates to better plan their day, or search for similar products near their current location in order to compare prices. When buying a high-value item, consumers can also utilize an NFC phone to authenticate that product prior to making the purchase, assuming there is an NFC RFID tag attached to it.

What to Consider Before Implementing NFC Technology
While there are many possible applications and benefits for NFC technology—some that may not have even been envisioned yet—there are still factors to take into consideration before moving forward. First and foremost, Near Field Communication is a consumer-facing RFID technology, requiring a new approach on multiple fronts. On the business side, consumer product manufacturers must change their focus from non-customer-facing operations to customer-facing communications.


Reader . 2010-06-01 12:43:23 AM
Not just cashless payment Don't forget that some of this movement into the NFC space will be for uses other than cashless payment. It is potentially a very wide ecosystem. http://www.personalrosettastone.com/

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