The number of NFC-enabled smartphones available in Australia is expected to rise dramatically, growing from 375,000 in Q1 2012 to 2.125 million in Q1 2013 – a growth of 467% year-on-year – according to Tapit.
It has also been forecast that by Q4, the number of NFC handsets in Australia will reach some 4 million – or 30% of all smartphones on the market.
Many industry experts have proclaimed 2013 to be a big year for NFC technology, including Telsyte analyst Rodney Gedda who believes that this year will see the technology becoming more mainstream:
NFC is quickly becoming a standard for all smartphones and the technology can be used for many applications, not just payments.
NFC will gain mass adoption the same way Bluetooth and Wi-Fi gained mass adoption by being integrated into devices people carry with them all the time.
But what will we be using it for? And how will it benefit marketers in Australia?
Simplifying the wallet
With an NFC-enabled mobile device, consumers will be able to use their phones to pay for anything from groceries to movie tickets to hardware, drastically simplifying the common wallet.
While Mastercard’s PayPass and Visa’s PayWave have already simplified the payment process, having an NFC-enabled phone will eliminate the need to carry around bank cards as consumers will be able to access their personal accounts through dedicated apps.
But not everyone is convinced that this will actually be useful.
PayPal’s president David Marcus has declared that the technology will “fail to gain mass adoption” and will “slow down in 2013”:
Is tapping a phone on a terminal any easier than swiping a credit card?
I don’t think so – it’s not solving a real consumer problem and its not providing additional value to encourage me (or anyone else for that matter) to change my behavior.
In agreement with this sentiment is Harold Dimpel, CEO of mHITs, an Australian SMS-based mobile payments service, who also doesn’t see the technology taking off, saying that he’s “seen NFC hang around like a bad smell for a long time”.
You know what I reckon the big joke is? What is in it for the consumer?
I’m not convinced there’s any advantage in me somehow linking my card to a phone and then using the phone to scan something at the point of purchase.
How is that better than me just sticking my card into the point-of-sale terminal and entering my PIN?
Potential for marketing
Despite the conflicting opinions about the usefulness of NFC in banking, experts are predicting that NFC technology will result in out of the box marketing strategies, bumping QR codes entirely out of the way.
Damien Cummings, APAC Digital Marketing Director for Samsung, is one of these people, believing that the technology could entirely change the world of marketing.
NFC is going to make your advertising and marketing so much more effective, as it brings the digital world into the real world.
You can now simply walk into a retail store like Harvey Norman or Best Buy, then tap an NFC sticker on a TV (or any product) to open a price comparison website, see real-time ratings and reviews of the product on social media or even buy it.
In the world of advertising, I imagine that all marketing collateral will have feature an NFC tag (replacing the cumbersome website URL or phone number) that prompts you to download more information.
It’s an exciting technology that has fantastic potential, which is available right now for smart marketers to use.
Will it be useful for marketers?
Tapit is already working on developing various marketing strategies using NFC, but co-founder Andrew Davis warns that the number of marketers who use NFC in their campaigns this year might not correlate to the growth in popularity among consumers.
While he estimates that brand uptake will be no higher than 20%, the possibilities from a retail perspective are already being lauded, as the potential for NFC technology to be used to increase engagement of consumers in bricks-and-mortar stores, is an existing reality.
Through clever placement of NFC tags, retailers can create an interactive, multi-channel experience for consumers.
For example, placing tags on rows of clothing to allow customers to see items displayed on-screen with different options, as well as enabling coupons, product descriptions, surveys, interactive maps or catalogues to quickly be delivered to consumer handsets;these are all existing options available via the innovative use of the technology.
The possibilities for NFC are huge and the technology is still very much in its infancy in Australia.
From mobile wallets to pay for public transport without physical money, through to NFC apps that allow you to lock and unlock your car – the technology enables consumers with practically limitless possibilites.
So, will 2013 indeed be the year that it becomes mainstream?
We will have to see. But as Jamie Conyngham, CEO of Tapit, summarises:
NFC is the enabler for easier content access. It enables objects and things that people can tap with their phone and immediately get content.
We think NFC is going to be huge in the marketing and communications space.
We see it as a tidal wave that’s going to sweep all phones with it.