Making Magic with Mobile Phones

By Rohit Dadwal|2nd Nov 2011
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Magic Mobile

Near field communication could revolutionise how you use your mobile phone By Rohit Dadwal, Managing Director, Mobile Marketing Association Asia Pacific Limited

It might sound like something out of Harry Potter, or a scene from a science fiction film: soon, mobile device users will be able to pay for goods simply by waving their devices at or near a table-mounted reader. This future may be closer than you think, and in fact, may only be a moment away. Called near-field communication (NFC, for short) this particular bit of technological magic allows for short-range (under 10 cm, hence “near-field”) wireless communication between devices, usually between a reader (tied to a cash register or payment system) and a mobile phone or other devices equipped with NFC chips. The information transferred during this communication can be used for simple transactions, a small amount of data exchange, and wireless communication.

As though mobile devices were not useful enough already, NFC-enabled smartphones (or tablets) can offer users yet another level of usefulness and functionality. For example, equipped with the right software, a mobile device with an NFC chip can be used as a mobile wallet or credit cards, facilitating simple payment transactions in a shop, for example. NFC-enabled mobile devices can serve as tokens of identity, so that users can use their mobile phones to verify their identity, especially in conjunction with password or thumbprint systems. Most excitingly, NFC-enabled smartphones can also receive data or information, which means that (for example) a consumer could see an NFC-enabled billboard for a movie, and then pull out his or her mobile phone and wave it near the NFC hotspot to receive, say, movie showtime information.

NFC looks like it is going to finally deliver on the payment potential of mobile devices, which will let people do away with cash, and simply use their phones for identity verification. Payment could be as simple as tapping your phone (or waving it near a sensor) and then verifying by punching in a password, or verifying with your thumbprint on a thumb scanner. This could also make payment options available to a great many people who have remained unbanked, either for lack of identify, or lack of banking facilities before.

This is not without potential. For example, Juniper Research has conducted a study that says “the total value of mobile payments for digital and physical goods, money transfers and NFC (Near Field Communications) transactions will reach $670bn by 2015”, a substantial increase from the $240bn projected for this year. Trials for NFC payments have already started in Australia (earlier this year), as well as in China and India, and even Singapore is projecting that its citizens could be paying for things with NFC as early as the middle of 2012.

Part of the reason for this very healthy forecast is simply the fact that NFC stands to make mobile banking a reality. Analysts have long realised how mobile banking could become the primary point of access in countries like India and Indonesia with significant numbers of unbanked or under banked citizens. NFC is the payment component, the one part that has been missing from mobile banking until now. We need only look to Africa, where mobile banking has taken off in a big way, to understand the possibilities that mobile banking holds for Asia.

What are the implications for mobile marketers? For a start, NFC will add another layer of richness and complexity to existing mobile marketing efforts. Additionally, it will attract even more people to use mobile phones, once they come to understand the convenience of carrying around a converged device. NFC can partner effectively with traditional media to drop bundles of information directly to interested mobile phone users. This in turn can lead to other content, rich media or otherwise, presumably designed for mobile consumption. Otherwise, the information can be used to direct consumers to locations, inform them of events, keep them updated on promotions – there is no limit to what can be done.

The main limitation for NFC at the moment is one of infrastructure. Mobile phone manufacturers are already making devices that include the requisite NFC chips, but banks, financial institutions, and governments need to work together to put in place the infrastructure of readers that will make those NFC chips worthwhile.

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