FEATURE: IRONIC – Will Apple lead the way with NFC?

Ironic_FishBy Frank Viljoen, Contributor.

(Editors Note: This was originally published this year in May, but we felt that some of the points raised here still had some significance, especially in light of the release of the iPhone 6)

For the last few years I have been focused and excited at the opportunity of using my mobile phone as my Wallet, primarily to pay for those low value items such as a coffee, travel tickets, ice cream, tube of toothpaste, single grocery items etc when you just don’t have the relevant change or £5 note handy. Fortunately in most cases, the retail outlet has been willing to accept the use of a debit card instead, however sometimes I just did not happen to have my physical wallet on me, which holds my debit card, so I have inevitably gone without purchasing the item.

Near Field Communications, a short range wireless technology which is built into the majority of recent Android, Windows and Black Berry handsets, is a technology which has been designed to do just that, along with a host of other exciting use cases.

Due to financial security implications and the amount of revenue which is generated through the use of card payment, there has been an ongoing saga between the Mobile Network Operators, Banks and handset Manufacturers over who is going to ultimately take ownership and be in control of the secure element in the handset and the consumer.

In the mean time, Near Field Communications has been gradually introduced to the Advertising and Marketing World by connecting the Digital world with the Physical world, allowing consumers to engage directly with Brands. However whilst this activity has been steam rolling ahead in Asia Pacific markets, there has been a much slower adoption rate in Europe, and the US for two main reasons, 1) NFC is thought to have been targeted at payments only and 2) Apple devices do not have the technology. For the last two releases of iOS handsets the iPhone 5 and iPhone 5s, industry specialists have been anticipating with abated breath that Apple would have included NFC, to no avail. While both these reasons do hold some relevance, there have been a vast number of missed opportunities whereby Marketeers, Advertisers and Brands may have been able capture Audience participation through the use of NFC in their campaigns.

Personally, all along I have intimated that had Apple included NFC in their handsets since the release of the iPhone 4 or 4s, we would not be sitting here deliberating about the tech in any way whatsoever and it would no doubt be second nature to us by now. Apple has been holding back on the technology, and I imagine not for reasons of lack of interest, but by using clever tactics.

While the debate of the Secure Element was ongoing, Google decided to release Host Card Emulation at the end of 2013, which took away the need for the required secure element to be held on the device, therefore a pointless debate between the MNO’s, Banks and OEM’s, which has proved to be a massive game changer in the payments world. Even more so since EMVCo approved the use of HCE for Contactless payments. Before the release of HCE, why would Apple risk the possibility of loosing ownership of their 800 million iTunes customers to banks or MNO’s, now they don’t have to be overly concerned. HCE allows a Contactless transaction to take place using any App on an NFC enabled handset.

All while this was going on, a large proportion of payment infrastructure within Retailers has had to be changed and implemented in order to accept these magical Contactless Payments along with general consumer education and awareness on the technology. In the UK we take for granted that a bank card works with Chip and Pin. The US still operate on Magnetic Stripe with Chip and Pin only being enforced from 2015. We cannot expect the consumer to adopt HCE NFC payments overnight.

One of the biggest factors holding Near Field Communications back has been the lack of Consumer Education around the technology. Behind NFC are some of the Worlds Biggest tech giants, Google(Android) and Samsung who by now have had more than enough opportunities to introduce the technology to the consumer and educate them of the multiple use cases. Apple on the other hand, have quietly been observing the situation in the background and doing just that albeit subliminally.

Until now Apple have not had the requirement for the use of NFC payment terminals in their stores, yet suddenly they are upgrading their POS to be NFC enabled. There has been speculation that the iPhone 5c has NFC elements within the handset and that Apple are releasing NFC enabled wearable Tech during 2014.

So with more and more recent rumours of the iPhone 6 having NFC either in it or as an optional extra, ie a clip on feature, is Apple now after all this time going to announce the adoption of NFC within their brand. If they do, they will certainly be able to take the market by storm.

Apple have been rolling out their PassBook App for some time now, and this in turn has been a massive consumer education process by getting their customer used to the idea of a ‘wallet’ on their phones. With HCE, PassBook could be used for Contactless Payments and all their customers will be familiar with the App.

NFC on the other hand are still way behind on educating the consumer on the tech, let alone arriving at the idea of a ubiquitous tapping icon or even a single wallet application.

So while Apple have not particularly had much influence on NFC moving forward in the market place, they are set to become leaders in the introduction of this short range wireless technology strengthened by the addition of their iBeacon marketing solution.

Read more on the SimplyNFCSolutions blog

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Categories: Near Field Communications

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