Near Field Communication: More Than Just a Mobile Wallet

Last week’s Mobile World Congress in Barcelona brought more news surrounding the near field communications (NFC) space. Among other developments, Google CEO Eric Schmidt said NFC-based payments “could turn into a serious business for the company,” while five of Europe’s largest carriers agreed to partner on one initiative, and Research In Motion co-CEO Jim Balsillie said “many if not most” of new BlackBerry handsets will feature the technology.

As I’ve said before, there are plenty of reasons to doubt the prospects of an NFC-powered mobile wallet in the short term. Sustainable business models must still emerge, an expensive back-end infrastructure must be built and there’s little incentive for consumers to use their phones to over credit cards or cash (although that could change with the emergence of payment applications that enable users to better monitor and control their finances). But while NFC will arrive in handsets before the consumers and the industry will be ready for it, there are still some possibilities for the technology in the interim. Here are a few:

  • Mobile marketing: Like mobile barcodes — but perhaps even more efficient — NFC can be used by marketers to engage users on their phones with just a click or two. Chips can be embedded in movie posters, say, or in stickers on goods that can be “clicked.” This would enable the user to easily access a movie clip, a discount offer or simple product information. And brick-and-mortar retailers can install readers that let users join an e-mail list with just a wave of their phones.
  • A virtual fingerprint: Restaurants, concert venues, bars and other brick-and-mortar sites could virally market themselves via NFC by encouraging users to advertise for them through social media. Users could wave their phones near an NFC chip to “Like” a business on Facebook or check in on Foursquare or Yelp — a far easier scenario than launching a mobile app and typing in a message. Google is pursuing that strategy in Portland, Ore., by packaging NFC with its Google Places window stickers for retailers. The stickers are used to deliver information about the business, and to enable consumers to recommend the business on Google.
  • Application discovery: Countless retailers and other businesses are churning out smartphone apps to engage with customers on the go, but those apps are easily lost among the hundreds of thousands of offerings in Apple’s App Store and Google’s Android Market. Instead of asking consumers to track down your app in those vast libraries, an RFID-enabled poster or sticker could deliver an app directly to the phone, enabling a user to download it quickly and easily before moving on.
  • Peer-to-peer: On-the-go users could easily click the phone of a business associate or new friend to exchange contact information or create a connection on LinkedIn, Facebook or another social network. That kind of activity never gained traction with infrared technology in the early days of mobile data, but it could be a compelling use case within an app like Facebook.
  • Walking tours: With NFC-enabled displays, tourist-type destinations like museums and historic districts could deliver information to guests through their phones as they move from exhibit to exhibit.

None of these scenarios is as sexy or potentially lucrative as mobile payments, of course, which is why you haven’t been hearing so much about the latter. But while the mobile wallet may never gain traction the way some hope it does, a powerful new tool is nonetheless coming to handsets. Savvy advertisers and app developers should pay attention.

Question of the week

How else can NFC be leveraged beyond the retail counter?