For years, Near Field Communication (NFC) has been the domain of Android-based smartphones. Widely used in Europe and Asia, NFC had never truly broken through in North America, and particularly the US. Now with Apple’s announcement of the inclusion of NFC in both the iPhone 6 and the AppleWatch, NFC will suddenly be “discovered” by the legion of Apple loyalists, rendering it legitimate and relevant overnight. Wait until the ads with hip new music start this week. But it won’t be just Apple crowing about NFC-enabled mobile payments. They will have plenty of partners, including McDonald’s, who will begin accepting NFC payments on September 15th. CVS and Walgreens, among others, are also reported to be gearing up for NFC.
Many people were certain that NFC would appear in earlier iPhone releases, but Apple has the luxury of moving slowly, and the marketing clout to convince people that an extra row of icons on the iPhone 5 home screen constituted innovation. If nothing else, Apple carefully considers every major move it makes, and the long-awaited addition of NFC is no exception. It was never going to be sufficient for Apple to market “tap to share” or any simplistic application of NFC technology. Instead, they took years to develop a strategy, knowing they would have one chance to get it right, and more importantly, to dominate. And now it is prime time for both Apple and NFC: Hammer had it right back in 1991:
Without doubt, the imperative driving NFC for Apple was always inserting the iPhone into secure payment systems, allowing Apple to take a piece of every NFC-enabled transaction. Agreements with Visa, MasterCard and American Express appear to be the evidence of a decision to embrace the established credit payment giants, rather than to compete with them, at least for now. Adding the AppleWatch as an option for the ApplePay scheme would give consumers both a reason to feel good about “tap to pay” and to also consider strapping yet another screen to their wrist. The buzz over the announcement will undoubtedly focus on NFC-enabled payments. However for digital signage operators, the impending legitimacy of NFC presents opportunities that go beyond transactions.
At a high level, NFC simply allows communication and data transfer between two devices when they are placed in close proximity to each other. If you have used a Mobil SpeedPass, you already know how it works. The inherent opt-in action of tapping an NFC hot spot makes NFC the perfect technology to bridge the yawning chasm between a digital signage display on a wall and the smartphone in nearly every pocket. Think about some of the possibilities:
Tell Me More: A consumer sees and hears about a topic or a product on a digital signage screen, and wants to know more: show me reviews, tell me where to buy it, send me a recipe, give me nutritional information on a product. Tap the hot spot and your smartphone can take you there, either for instant consumption or reading later.
Let’s Make a Deal: An item is promoted on a digital signage display and a coupon for extra savings is offered to those who tap the NFC hot spot. With customer opt-in to provide the IMEI from their smartphone and down-the-road integration with customer databases, the coupon can be tailored to an individual.
Delivery, Please: See it, like it, buy it. Tap-to-buy is certainly an opportunity for digital signage networks to get into the transaction business. Tap the NFC hot spot and get a quick form for having something you see on the screen sent to your home or office. I’ve been waiting for that since 2011. The Twitter buy button is getting a lot of press and generating excitement. If 140 characters and a JPEG excite advertisers as a motivator, then a 30-second sound and motion video has to send them over the moon.
Buh Bye, Collateral Racks: Bulky, expensive collateral racks, which boast extremely high ROI when paired with relevant digital signage, can now be replaced with NFC tags.
Synching Content With Offers: The ability to change the behavior of a single NFC tag or set of tags throughout a venue to match the changing offers, information or products on the screen is inherently valuable. Our recent integration of NEOCAST with iZipline’s MediaTagz system provides exactly that. The NFC tags in an enabled environment are able to direct the smartphone to initiate different actions based upon the currently playing content. We live in a world of glance media: the ability to provide more information, promotions and even transactions to people on the go greatly increases the value of the on-screen content.
NFC is nothing new, but Apple’s warm embrace of the technology takes it from “cool, but…” status to mainstream relevance. NFC payment systems will pop up so fast in the coming months that it will seem like they have been here forever. Digital signage operators and content producers will quickly learn the value of embracing the communication and data exchange that NFC offers. iBeacons made a lot of noise recently, but now the playing field, utility and consumer control has passed to NFC. It’s here, it’s near and it’s too legit to quit. Sing it, Hammer.
UPDATE (9-16-14): According to an article published on the Gizmodo website, Apple has locked down the NFC capabilities to ApplePay only. The article speculates that is temporary, and consistent with Apple strategy to control and allow the developers to catch up with a wide range of apps. While this is bad news in the short term for proponents of NFC in non-payment applications, in the long term, Apple is likely to unlock the chip, perhaps with the next iOS update or the release of the 6S. Doing so with wide application support also allows them to monetize the apps. Kudos to commenter Gabriel, who called it several days earlier. In any event, more users will be exposed to NFC through ApplePay, and demand for other uses will increase, as will marketing from the Android side, where NFC is not locked down. This is hardly “Taps” for NFC.