Craig Barber, Head of Innovation and Emerging Media at Rapport, recently wrote an article for Brand Republic’s ‘The Wall’, which discusses Near Field Communication and what consequences the arrival of Apple’s iPhone 6 can be expected to have on NFC:
Near Field Communication (NFC) technology has received a somewhat tepid reception, with some analysts asking if NFC was a dead tech. However, the announcement of the Apple iPhone 6 seems to have buoyed the NFC believers.
If there is one brand that can make a technology cool, then Apple are the masters. So what impact will Apple’s announcement have for the future of NFC technology?
The most important and arguably talked about announcements of the iPhone 6 was its mobile wallet feature. It allows for card details to be stored on the phone so that payments can be made via tapping a card reader. Apple believes this level of convenience will be a major hit, with the system having access to no less than 220,000 retail sites in the US with major partners American Express, MasterCard and Visa all jumping on board to support the venture.
This represents 83% of all credit card payments in the US (in terms of volume). McDonald’s is one retail outlet that will accept this form of payment, which will certainly help the understanding of the payment method to the mass audience. Certainly in America this is an exciting development where many transactions are still completed by inserting your pin and signing. But what about the UK? Our market has been on board with NFC usage for quite some time…
When you look at London habits, much is owed to the Oyster card where circa 75% of all journeys now use the contactless card. The recent introduction on the London transport system that allows for contactless payment via your credit card (other than an Oyster) is of no surprise. Edinburgh launched its own transport card this year called CitySmart.
Perhaps the most important factor of all however is the British banks. There are now 48.3m contactless cards in circulation across the UK, proving that NFC technology is here to stay for the foreseeable future. Consumers with these cards can buy any goods under £20 at a simple tap. However, this figure still only represents one third of all credit and debit cards in circulation across the UK.
At present, nearly all new bank cards that are issued to customers will have the contactless payment feature. With many cards having a minimum two year expiry, it may be some time before we become a contactless paying society. Whilst the iPhone 6 will raise awareness and take the plaudits, the reality is that banks hold the key to educating the public and putting them at ease with NFC tech.
Apple is planning to distribute 80m iPhone 6’s globally this year… a drop in the ocean when we think of the potential for contactless payment via credit and debit cards. Providing payment wallets via a smartphone does not mean people will use it – a point hugely overlooked in the iPhone 6 analyses from commentators. As the saying goes, you can lead a horse to water, but you can’t make it drink.
The truth is that there can be no more excuses for NFC, certainly when we discuss the technology in terms of the out-of-home (OOH) market. Those of us in media appreciate and understand the huge potential that NFC can provide our clients – but in many respects we are preaching to the converted. Until consumers see that same benefit and more importantly trust that their money is safe, we will forever be part of a secret club.
Apple will certainly drive awareness and understanding of how the payment system works as it will have to educate people to accrue its investment back. But the key is to place the technology into people’s hands and unless Apple is planning on giving away free iPhone 6’s, the most practical and effective way will be via the banking sector. Once consumers trust the payment feature on their own bank cards, they may well find they are just as happy to tap a poster with their smartphone and pay for the latest book release. The iPhone 6 is welcome, but it is not going to change a lukewarm market overnight. Either way, there can be no more excuses for NFC in OOH.