With the advent of NFC and a wave of new mobile phones supporting this new technology will it improve the shopping experience for us consumers or will it be another failed attempt by banks, operators and others to create another "eWallet"?
With the increased chatter about NFC since Google stepped into the ring with the Nexus S, Eric Schmidt's statement at the MWC that "it's a mega-scale opportunity" and more recently that they are working with Mastercard and CITI to launch this, I decided to get some hands-on experience in the wild using this new technology and what it may offer it's once available on a large scale. So I set out the other day to compare the experience in the shop when using the various non-cash options available (chip & pin etc), including an NFC-emulated experience using an RFID tag on my iPhone. (apologies for the quality of the video, paying with one hand and filming with the other was a bit tricky)
Take-away from the test - In terms of speed the contactless payment using my mobile was unsurprisingly the fastest, but what wasn't captured in the video was the extra pre-store fiddle I had to do in terms of loading my mobile account with money, ensuring the app on the phone was running and that I was logged in and in payment mode. Of course, all these things can be streamlined if linked with your bank or Paypal account, but as with all new technology, the adoption of this will rest with the easy of use for the whole end-to-end process. So if the Google app for NFC payment (code named "Cream") once released delivers a poor user experience and the bank makes it hard to tap into your account, NFC will take a long time to be adopted by consumers.
It's not like NFC is new. Nokia launched an NFC phone 4 years ago with a promise of various use cases besides just payment, but with no ecosystem it failed to catch-on. Then there's Apple who might save the day by getting all the pieces tied together hooking into iTunes accounts and some other eWallet magic as hinted by a this patent application.
In the end I'm not sure the payment mechanism itself is that interesting (sure it's nice to carry less plastic in my wallet, but I will probably continue to, just as I have with cash) but rather the opportunity for innovation that brands can tap into. The link that is created between point-of-sale purchase and your online identify with all of this is the killer app. Linking up to deals, promotions, recommendations, check-ins, likes, loyalty programs, product tags, friends and followers all enabled by the three pieces of your mobile phone, Facebook connect account (for example) and an NFC chip opens up a whole world of really cool things you can offer people and make the offline shopping experience social, entertaining and more useful. This is clearly part of the "mega-scale opportunity" Eric Schmidt was referring to. Brands don't have to wait though, they can experiment with this today using low-cost RFID tech plus some software and involve their customers.