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NFC Needs Bells & Whistles

Sarah Thomas
3/31/2011

4:30 PM -- The time is near for near field communications (NFC) to explode and change the way we purchase and what we pack in our purses. With support for the technology growing more widespread and Google (Nasdaq: GOOG) looking to kick-start the market in a major way, it could only be a matter of time before we ditch our wallets. (See NFC Forum Brings In Google & 31 Others.)

That was the foregone conclusion at the Bricks + Mobile conference in Chicago on Wednesday. Companies were no longer talking about when it would happen, but how. And, that's where the disagreements came in.

Douglas Kilgour, who does sales and account management for the joint venture Isis, reiterated what most in the ecosystem have stressed: that NFC can't just be for payments. It has to add more value, whether that's in the form of coupons, loyalty points, advance notice of sales or -- cough -- relevant advertising. Even Troy Bernard, head of global chip technology at Discover, agreed. (See CTIA 2011: Operators Avoid App Syndrome With NFC .)

But, in the following panel, Gary Schwartz, president and CEO of Impact Mobile and chair of the Mobile Entertainment Forum, said that services like this could be muddying the waters. Shouldn't the industry just prove that making a simple payment works before adding the bells and whistles?

I fall into the former camp -- bring on the bells and whistles. I don't think the industry can prove payments work without some value-added services. For as much excitement the industry has for NFC, consumers won't share it unless there's some real worth (and targeted ads don't count).

It's just really not that hard to pull out a credit card. I even have a miniature one attached to my keys, and -- like with my phone -- I don't go anywhere without my keys (on purpose).

Isis has done studies that show 86 percent interest levels in the mobile wallet amongst consumers for the convenience factor. [Ed Note: He also said the carriers would prefer more of a 30 percent interest level, because that much interest is scary.] Sure, it's convenient, but only if it works, really, really well. So far, that's not the case with most contactless solutions.

The fun additive reasons to use NFC need to be there from the get-go, and the company that executes this well will likely grab the most customer attention in a space where many are vying to be the mobile wallet of choice.

— Sarah Reedy, Senior Reporter, Light Reading Mobile

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