Setting up a New Year contest for rival smartphones

New smartphones are coming equipped with NFC – near field communication – and are poised to make your credit and debit cards, receipts, even your wallet itself, redundant. The technology allows your smartphone to be a payment card. Just tap your phone against an NFC-equipped terminal to make payments under £20, without the need for a PIN, as Nate Lanxon reports


Payments and mobile wallets

The average fare for a journey in a London black cab is around £12, which makes taxis perfect candidates for contactless NFC payments. VeriFone, which provides electronic payment infrastructure, has fitted NFC terminals in 5,500 London taxis.

Mark Roberts, vice president and general manager of VeriFone Taxi and Media Solutions UK, believes NFC-equipped phones are the wallets of the future. “I wouldn’t have put NFC into every single taxi if I didn’t think this is the way it was going to go,” he says. “I fundamentally believe that the London taxi market will be one of the massive adoption areas.”

Mr Roberts asserts that “everything is going towards the mobile” and the catalyst is simple convenience. “I don’t want to have a load of £5 notes and receipts in a fat wallet,” he says. “In today’s world it’s not actually that practical.”

He believes the wallet is not that important anymore. “If I get half way to the train station and I forget my wallet, I don’t go back home for it,” he says. “But if I leave my phone at home, I’m straight back to get it.”

VeriFone includes NFC across its entire portfolio of payment terminals. But this was just one of a number of hurdles; getting NFC-enabled phones into the hands of consumers has been a different battle entirely.

“I think we’ve got to the top of the mountain,” Mr Roberts says. “You’ve now got the first commercially available [NFC-enabled] mobile phone that everybody wants to have, in the Samsung Galaxy S III.”

Mr Roberts predicts that in 2013 there will be 15 to 20 handsets that have NFC technology, including a new iPhone. Bearing in mind VeriFone’s support for the UK NFC market, it might be wise to leave a new wallet off your Christmas list this year. 

Smart tags

Part of the NFC battle is getting the technology into smartphones. Now that battle is beginning to be won, companies are setting themselves up to target those handsets.

One such company, a start-up based in London, is Blue Butterfly. Its product is a simple, low-cost piece of technology called an NFC smart tag.

Some smartphone makers, such as Sony Ericsson, use proprietary tags that take the form of coin-sized pads that can be stuck to desks or walls and can activate phone features or apps whenever a device comes close.

Blue Butterfly, however, has its sights set on wi-fi. It wants to use smart tags to make it easier for people to connect to wireless internet hotspots. A bar, for example, may offer free wi-fi to its patrons, but instead of displaying posters with wi-fi codes needed for access, it could attach one of Blue Butterfly’s tags to its furniture.

“We’ve even built the NFC into beer mats,” says Andy King, chief executive of Blue Butterfly Digital.

Tapping such a mat would activate the wi-fi without a code. But the business behind this experience is more interesting still.

“When you connect to the wi-fi, you’re redirected to a landing web page,” says Mr King. “If you had our app, you could potentially see targeted advertisements [on that].

“Because you’re getting the customer’s location very accurately, you’re able to do local marketing a lot more effectively. It’s got your attention and your location.”

The service is free to use and Blue Butterfly’s costs are covered by venues using its smart tags or companies who sponsor the wi-fi at such venues.

If 2013 becomes the year of NFC, companies like Blue Butterfly are ready to grow. “The tags themselves cost a few pence each, so we could potentially scale this quite quickly,” Mr King adds.

Events

Location-based check-in services, such as Foursquare, are inherently reliant on smartphones. But they’re equally reliant on users making the effort to load an app and manually check themselves into an event, such as a conference. Smartphone NFC could take some of this burden.

Blue Butterfly is also aiming to tackle this issue. “When you connect to the wi-fi you could link it to other services,” says Blue Butterfly chief executive Andy King. “One of the other things we can do with our tag that’s unique is that we’re not only connecting to wi-fi, but we can launch third-party apps. So if you’re a Foursquare user we could check you in automatically.

“We’ve tested at the Droidcon conference where it was used over two days by more than 100 users. We got over 10 per cent of the footfall to install and use the app multiple times.”

While this may be considered a positive result, outside the realms of conferences that specifically focus on the Android operating system (on which Blue Butterfly relies), others are more timid.

Kevin Hartz is co-founder and chief executive of Eventbrite, a web platform that helps event organisers manage their ticketing and other logistics. But in his company’s experience, the timing is not right for such uses of NFC.

“We’ve done research and studies on NFC, and created prototypes for NFC, but the market isn’t ready for us to release a product,” says Mr Hartz. “We don’t want to get too far ahead of the market.”

He cites Apple’s influence on mobile apps as a comparison. “You wouldn’t have been successful if you launched a mobile app in 2005 before the App Store,” he says. “Or if you launched YouTube in 2000 before broadband adoption and embeddable Flash.”

Perhaps, it seems, only part of the NFC battle has yet been won.