The launch of a standardised mobile contactless payment platform aims to accelerate the take up of contactless payment but could also bring brands one step closer to launching truly targeted location-based campaigns.
It is intended that the platform – a joint venture, between Everything Everywhere, O2 and Vodafone – will deliver the technology required for speedy consumer adoption of near field communications (NFC) services, which allow shoppers to transfer the entire contents of their physical wallets on to a SIM-based storage system on their mobiles.
For brands, it aims to provide a single point of contact to book advertising space, create offers, coupons, transport and event tickets and loyalty cards to be stored on consumers’ smartphones and redeemed in shops.
The new “one stop shop”, it is hoped, will allow brands to reach an audience of millions or a targeted demographic, across all three networks to run campaigns.
The contactless payments market is predicted to reach more than £200bn by 2014, according to IE Market Research and despite only one such service live at present – Orange and Barclaycard’s Quick Tap – many brands are already discussing how they can take advantage of the new technology.
Jon Mew, director of mobile and operations at the Internet Advertising Bureau, says: “NFC is something we get asked about a lot. It has been a real hot topic in the last six months, with lots of interest leading up to the Olympics.”
He adds that the joint venture gives advertisers more confidence because campaigns across operators will be easier to manage, although consumer confidence is not yet at a high enough level.
“But you just have to look at e-commerce to see it won’t take long to reach a mass uptake. M-commerce with have a quicker uptake than e-commerce because consumers are comfortable with the technology.”
Consumers appear to have quickly adapted from paying from their desktops, to paying from their mobiles. EBay says an item was bought every two seconds through its app in 2010, just two years since it was launched on the iPhone.
Tim Sefton, O2’s business development director, says the company has already received a significant amount of enquiries from retailers, banks and other brands since the joint venture’s announcement last week.
He says: “The reaction has been particularly positive because we are creating a combined customer base with defined individual segments for targeting.”
Advertisers can target the combined tens of millions of customers in the joint venture by gender, location, age and preferences about interests – such as cars, holidays and clothing.
Sefton says: “We have created a ’win win’ situation between customers and brands by marrying them together in a mutually beneficial way.”
Brands also have the opportunity of becoming “customers” of the joint venture, to add their customer data for advertisers to target, although there are no plans as of yet whether companies can join on an equity share basis. Everything Everywhere, Vodafone and O2 will hold an equal third equity share of the venture.
Neil Garner, CEO of NFC solutions provider Proxama, says that to take advantage of NFC advertising when the JV launches, estimated for the end of the year, marketers need to start piloting campaigns and executions to explore its potential – as they would for any other technology.
He adds: “One of the key benefits NFC offers is the increased measurability and accountability, as all transactions and interfaces can be tracked, which is why brands like Google are so keen to be a key player in the industry.”
With all the possibilities NFC can offer, from vouchers to measurement, it may be difficult for brands to know where to begin on their mobile commerce journeys.
Berney warns that education for brands will be “as critical” as simplifying commercial activities. The mobile operator joint venture is just one step on the way to NFC becoming as commonplace as SMS.
NFC, a recent history
- November 2010 Nokia confirms that it will activate the contactless payment technology that is already in its C7 handset.
- January 2011 Apple is said to considering including NFC technology in the next iPhone
- February Blackberry confirms it is to explore contactless payment technology in time for the 2012 Olympics
- May O2 partners with Visa to deliver its “mobile wallet” contactless payment service.
- May Google launches “Google Wallet”
- May Orange and Barclaycard launch mobile payments service
- June Everything Everywhere, Vodafone and Telefónica UK announces launch of a joint venture to create a standardised mobile payments platform