NFC may sound Greek to a lot of people as it is comparatively unheard of in India. India is among the largest non-NFC countries. India has a market size of USD 322 billion and representing a mere four per cent of organised retail.
What is NFC?
Near field communication (NFC) is a set of standards for smartphones and similar devices to establish radio communication with each other by touching them together or bringing them into close proximity, usually no more than a few centimeters. Communication is also possible between an NFC device and an unpowered NFC chip, called a ‘tag’. NFC traces its roots back to radio-frequency identification (RFID) which allows a reader to send radio waves to a passive electronic tag for identification, authentication and tracking.
NFC usage in Retail
NFC devices can be used for easing payment systems, which we currently use through credit cards and electronic smartcards. Mobile payments will be a hassle free replacement to these payment processes. Loyalty programs and marketing can also leverage this technology.
Suppose you are standing in a queue at the checkout counter. Instead of rumbling in your pockets to find the exact change to be paid, just open the wallet app on your phone and tap and voila, the payment is through. This is what NFC brings to retail.
Retailers across the globe are ramping up their NFC portfolio to offer greater convenience for their customers. KFC in United Kingdom has installed posters will provide a proximity search that will let consumers find their nearest restaurant. Wal-Mart, Target, 7-Eleven, Best Buy and other major retailers in the US are already riding on the NFC wave.
The latest on the block is PVR which has launched the ‘NFC enabled PVR Wallet’ app for the BlackBerry 10 platform. PVR app has been bolstered by NEC India, which is the supporting backend provider for ‘PVR Wallet'. NEC India has provided an end-to-end cloud-based e-payment system called NFC e-Money server to PVR that integrates itself facilitating interactivity between devices (the NFC enabled phone and PVR wallet access), for any monetary transactions. Pramod Arora, Group President & CEO, PVR Ltd. said, “With the launch of this latest application, PVR reiterates its commitment to provide it’s consumers the latest in technology and innovative features making lives of movie lovers simpler, faster and worthwhile.”
The Metro Rail project too shall shortly come under the NFC umbrella with Nokia offering NFC based ticketing.
xpWallethas introduced an NFC ticketing solution for bus and train operators that lets commuters purchase tickets from conductors equipped with NFC phones.
Game4U has installed smart posters in its stores that let NFC phone users tap their handset to 'Like' the retailer on Facebook. Their platform is developed Jus Tap!
Tata Docomo users can pay bills, to top up their prepaid talk time account, to download ringtones and wallpaper and perform a number of other value-added services using NFC. They have set up self-service MMT terminals facilitated by US-based Xius.
Advertising too will get integrated with NFC enabling customers to tap on an advertisement panel they see and get the offer on their phone for redemption.
Setting up an NFC platform does not call for a huge expenditure. The technology installation may not be very heavy on the packet, but will surely add to ramping up a retailer's customer base.
Mobile manufacturers & Technology providers gear up
Mobile phone manufacturers have identified the use of this technology and are launching phones that come with an inbuilt NFC enabled chips that facilitate easy payments. Latest in the kitty is Samsung that has announced the Samsung Galaxy S4. This device will allow coupons, loyalty cards, gift cards, event tickets and more to be transmitted from the device to any of the 165m laser scanners installed in retail stores. Blackberry has introduced many phones that are NFC enabled to facilitate quick mobile payments.
Technology firms too are gearing up to the challenge and introducing NFC packages for retail clients. NEC India, is bringing all its NFC solutions to the Indian customers as it offers in Japan, where it is headquartered.
Mobile manufacturers offering NFC
There is strong push by government to move to cashless payment to avoid Cash related issues (Black market, Cash handling, High cost of cash), thus we see a huge CAGR 26 per cent rise in e-payments. Mobile network operators, phone and device manufacturers, payments networks, service providers and retailers are all coming together to create a larger community for the use of NFC to ease a customers shopping experience. India would be leading the race in global Smartphone shipments increase of 30 per cent this year. 375 million people will use mobile payment services using NFC by 2015 and will have the global penetration of 30 per cent by 2015.