Yes, NFC’s lack of adoption and integration is a legitimate issue. A relatively small percentage of U.S. smartphones are equipped with NFC technology, and NFC’s need for new POS software steers many merchants towards QR codes and other new payments methods.
We know this, yet many in the payments industry remain convinced that in the long run, NFC will become the dominant mobile payments technology. A new NFC pilot by Kraft helps to demonstrate why that’s the case.
Kraft’s pilot, which ran at select grocery stores in San Francisco, placed both NFC-friendly RFID chips and QR codes on signs in front of products. When consumers interacted with either technology, they’d be shown product information, recipes and social media options.
The results of the pilot are pretty staggering: NFC users were 12 times as engaged as their QR code-using counterparts, and spent around 40 seconds longer interacting with the brand
According to Tim Daly, co-founder of NFC platform provider thinaire, the study highlights many of NFC’s advantages.
“The most compelling way to onboard a mobile interaction is using NFC,” Daly told Mobile Commerce Daily. “It is a frictionless technology – you don’t have to download an app.”
“We had a QR code side by side with NFC in the pilot and 92 percent of the interactions were with NFC – that shocked us,” Mr. Daly said.
While Daly’s likely to be just a little biased towards NFC, his points remain valid: if and when NFC does become more widely adopted, it will have some pretty clear advantages over QR code and 2D scanning systems.
We’ve seen companies take all sorts of varying stances towards NFC.
Isis is in many ways putting all of its payments eggs in the NFC basket, and many feel as though it’s jumping the gun by launching now. Consumers don’t often yet find themselves in situations where paying with NFC is a viable option, but Isis clearly believes that’s where the immediate future is headed.
We’ve profiled companies such as LevelUp and MoBeam who preach an agnostic approach to choosing one form of payments tech over another. We heard CEOs from both companies tell us that NFC could feature prominently in the future, but that it doesn’t do much right now. As such, their products will be able to work in conjunction with the technology in the future, but are still fully functional today.
Finally, we’ve seen companies like PayPal ditch NFC all together, saying that it doesn’t offer enough to truly drive consumers towards mobile wallet use. We’ve spoken to a MasterCard exec who, while stopping short of condemning NFC entirely, expressed views similar to those from PayPal.
And perhaps most (in)famously, Apple declined to include NFC capabilities with the iPhone 5 – a strong indicator that it doesn’t believe the times is now for the divisive tech.
Yet every time we’re ready to write off NFC completely, a pilot like Kraft’s pops up and makes us reassess the debate all over again.
“We had a QR code side by side with NFC in the pilot and 92 percent of the interactions were with NFC,” Daly emphasized. “That shocked us.”
To read more about Kraft’s NFC findings, click here.
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