NFC is becoming as left behind as YouView

Lara O’Reilly is Marketing Week’s digital and telecoms specialist and here she gives her own view on what companies from Apple to Zynga are up to in the wired world of the web

Contactless Payment

Near-field communications (NFC) has barely been off my radar when writing about mobile and telecoms for the past year.

Just one mobile operator – Orange – is currently carrying the service, which allows customers to pay for items or access extra content from ads and cash termianls by swiping their mobiles in the UK. Vodafone is still running field trials and O2 has changed its projection for the launch of the mobile wallet from “the second half of the year” to “the final quarter”.

Despite no other service currently looking close to being available over here, operators, handset manufacturers and technology companies such as Google are all driving the ambition to have a contactless Olympics.

Less than a year away from the event, it seems this “drive” is somewhat stalled.

A very reliable source has told me that the joint venture (JV) between Everything Everywhere, O2 and Vodafone created four months ago to kickstart the use of NFC by brands and consumers in the UK is due to send documents to the European Commission “in a couple of weeks” to launch the official legal process to open the scheme.

Of course, this will also be subject to further red tape, including an impending complaint to the European Commission by rival operator Three, which is looking to block the proposed venture.

The JV’s delay reminds me of the almost perpetual postponement of the launch of the YouView internet-connected TV platform – the joint venture between the BBC, BT, Channel 4, TalkTalk, Channel 5, ITV and Arqiva.

The project, originally dubbed Project Canvas, was initially announced in 2008. Since then, countless rival services have launched including Samsung Smart TV, Google TV, Hulu, Netflix, Apple TV and Virgin’s TiVo. YouView’s rollout, meanwhile, has been delayed until some time in 2012.

TV commentators have pointed out that 2012 is just too late to launch YouView, when consumers are willing to pay for their rivals’ services now – and their rivals have time to keep on adapting to the marketplace.

This is my worry with NFC and specifically the UK’s joint venture. When it comes to mobile payment, there are other options available and, importantly, some of these options are already available or due to launch in the coming weeks.

NFC is unlikely to have mass penetration in the UK for some time, despite more than 50,000 enabled payment terminals being available in the UK. The ecosystem requires the scale and the handsets in order to be worthwhile to consumers and for brands to even consider using it as a marketing option.

But other ecosystems, such as The Mobile Money Network’s Simply Tap, doesn’t have these hurdles to overcome. The technology is so simple that users will even be able to send an SMS or take a picture of an item with their camera phone in order to purchase it.

Simply Tap

The service already has more than 30 brands involved, including high street retailers, and media outlets like Bauer, so consumers can look at an advert and purchase their item of choice in a matter of seconds.

John Milliken, managing director of The Mobile Money Network said to me the other day: “I’m not sure as a consumer that NFC means something to me. Until it is ubiquitous, I’m still going to need to take my wallet out with me and consumers still need to be educated. At the moment NFC isn’t really about mobile payment, it’s just another way to identify things to your phone.”

I’m inclined to agree. When it comes to payment in particular, NFC doesn’t seem to streamline the process. As far as I’m aware, you still need to visit the shop and you still need to swipe at a terminal – like those self-service machines at supermarkets that still form queues and tend to cause more bother than just waiting for an assistant.

The main draw for NFC is for advertisers: the ability to offer coupons or serve advertising based on location or what a customer has bought or what is taking up residence in their mobile wallet – but consumers need to be using it in the first place for brands to have any interest.

Every week that rolls by without a solid ecosystem for NFC in the UK is another jolt to it becoming dangerously irrelevant as new, simple services spring up with the important high street backing.

Much like YouView, the launch of NFC in the UK has been mooted for well over a year. But where on earth are they both?

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