Can the mobile phone be the next new currency?
“A phone that travels with you; or one that pays for your travel? An interesting question that takes on new proportions when you find out that it’s not just rhetoric! Going by the way Blackberry is talking NFC (Near Field Communication) the credit card industry could possibly find its future avatar in the mobile phone.
It may be early days yet, but emerging mobile technology in the form Near Field Communications (NFC) is pitted to be the next big wave to take the mobile industry forward by enabling end-to-end mobile payments and mobile commerce right from the handset.
According to Blackberry’s Mike Al-Mefleh, Director of Product Management and Services with the technology now being a standard feature across its devices (from the low-end phones to the hybrid and full-touch models), tapping to pay will soon be a market reality.
Change has already set in with the device maker pushing for peer-to-peer data sharing by using the Blackberry Tag service. Tap to pay is not far away as Blackberry are already exploring a number of partnerships across the region including collaboration with telcos and banking institutions to enable NFC-based payments.
For the uninitiated, NFC by definition is a short range wireless RFID technology that makes use of interacting electromagnetic radio fields instead of the typical direct radio transmissions used by technologies such as Bluetooth. It is meant for applications where a physical touch, or close to it, is required in order to maintain security and the technology is planned for use in mobile phones for, among other things, payment.
As the technology reaches the mass production by virtue of being integrated as a standard feature on smartphones, what it will effectively do is to turn the mobile into an instant wallet and access device, allowing users to basically use the phone to pay for what they buy by simply tapping or scanning it in front of the NFC readers placed within five meters of proximity.
Currently, industry estimates point towards greater uptake of this technology in sectors like healthcare, banking and government before it reaches mass markets. Blackberry’s Al-Mefleh estimates that this year the industry could see the commercial availability of about 40 different NFC enabled devices, which will go up to 140 by next year. Reports also indicate that by the year 2015 about $74 billion worth of transactions will happen through NFC-enabled devices.
Although the Middle East’s progression towards this technology has only just begun, the all-important ecosystem that is required is already being built out thanks to players like Blackberry, public sector players and operators. Good examples will be the company’s collaborative efforts like the tie-up with QTel and Qatar National Bank (QNB) to enable mobile payments. In the UAE, RTA and Blackberry are also teaming up to pilot the Nol NFC-based payment service for public transport services including the Dubai Metro.
Interestingly, there’s more where this comes from with the developer ecosystem taking a cue from this trend. One of the promising demos that I came across was from Digit Secure, a Blackberry partner that is set to launch an NFC-based service called ‘Hot Remit’ that will literally offer small merchants a plug-and-play solution to leverage NFC based services and loyalty programmes using their smartphones.
The company’s Director for Solutions and Operations Jay Krishna says the application itself will be available for free download on the app store and enabled to work on BB7 and BB10 architecture based devices. The application that will be hosted and delivered on a cloud-based model can be configured to turn the Blackberry into a point of sale device, pre-charge a loyalty card with currency for shoppers or serve as an instant coupon generation engine, giving the merchant a chance to leverage the technology without making heavy investments.
From the hype surrounding NFC at GITEX TECHNOLOGY WEEK 2012, it’s certainly looking to me that the mobile phone we all know and have grown to love is taking on a new life. While I don’t want to hazard a guess yet on where we will go from here, I’m not wrong to think that mobility might just change our lives forever.