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Groundhog Day at NFC World Forum Europe

I was at the second day of the Near Field Communications World Europe conference last week and thought it was worth capturing some of the discussion. Because despite several humorous references to Groundhog Day, there were a few interesting points that came out of the presentations and banter, proving that it's not quite same old same old and that progress has been made.

There are no real barriers

Facilitated and cajoled by Dave Birch, a panel of experts (Dominic Peachey - FSA, Saadi Hussain - BT Global Services, David Brendl - Telefonica O2 Czech Republic) agreed that in Europe at least,  there are no regulatory, structural or operational barriers preventing the roll out of NFC services. The age old culture clash between network operators and banks was discussed but most agreed that commercial collaboration and the establishment of common goals is possible. This we probably all knew anyway, but what was interesting was that Dominic Peachy said that although there are no regulatory barriers, the FSA has no objectives for driving payment innovation. I was left thinking that if there were such objectives in place, then NFC would be higher up on the financial services agenda. Shouldn't payment innovation, with the potential savings that it brings, be something of a priority for all countries?

What's in it for the banks?

Whereas network operators can see the benefits of offering new services to their customers, which can help to reduce churn, it was widely agreed that churn isn't really an issue for banks. It seems that it's just too much hassle for us to change our bank accounts. So - it has to be about something else. Telefonica O2, based on a project they ran in the Czech Republic, proposed 3 benefits for banks transaction uplift, fraud reduction and improved CRM. Interestingly, giving anecdotal evidence from the same project, David Brendl mentioned the importance of balance check functionality for mobile NFC applications. People would rather draw cash from an ATM than pay with a card or phone and risk the embarrassment of not having sufficient funds in their account.

It's about cash replacement

The ideal environment for NFC to flourish is one with few ATMs  - which is why Citibank is focusing on India for its next big project. The poor results of the contactless payment initiative in London (cited a "marketing disaster" by Vivotech's Mick Mullagh) was used to illustrate another requirement for success - you need a tight metro community with lots of acceptance terminals in place. Bringing a note of realism, StoLPaN's Andras Vilmos pointed out that retailers are likely to need some kind of financial incentive to get them on board, having just shelled out for chip and PIN in Europe. And where would the financial incentive come from? Singapore seems to have the lead here. They do see the benefits of payment innovation and the cost saving of taking cash out of the equation. Dave Birch, a consultant on this project stated that subsidising contactless and NFC is part of the Singapore government's cash replacement strategy.

Really making it work

Dion Lisle of Citibank Growth Ventures and Innovation made an interesting point about really making NFC happen - beyond trials. Referencing the success of Apple's App Store he pointed out the importance a "complete ecosystem". I read something recently about NFC and loyalty and how it could all work really well if we viewed mobile phone apps a bit more like ring tones and made them as easy to obtain and dispose of  - and I'm sure he's right. I left the conference feeling very hopeful for NFC, sure that there's an unstoppable momentum now and that next year we won't be talking about Groundhog Day.

Tagged with Mobile Near Field Communication

0 Comments. Posted by Victoria 19 May 2009

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