Recently, Starbucks announced that it would begin accepting mobile payments – via an iPhone app – at its 6,800 stores and in-store Target locations nationwide, the first significant rollout of a mobile payment system by a retailer in the U.S.
Then, Tuesday brought news – based on unconfirmed rumors – that Apple was going to include near-field communications technology, or NFC, in the next generation of its hugely popular iPhone (16.2 million units sold in Q4 ’10) and the iPad (7.4 million units in Q4 ’10). Simply described, NFC is like a contactless payment card integrated into phones – that is, technology that allows customers to forgo their credit cards and cash and “tap” to pay with their smartphones instead.
When you take into consideration the recent announcement that Verizon will now offer the iPhone, with an expected addition of millions more iPhone users, you have the perfect storm for the latest frontier in m-commerce: the proliferation of mobile payments – expected to balloon to $1 trillion by 2015, according to one executive – with NFC-enabled devices as the foundation.
NFC technology has been around for a few years: Google has announced that NFC would be included in phones with the Android 2.3 OS. And credit card-linked bank cards such as those branded with Visa (Blink) and MasterCard (pay/pass) already use a version of NFC that allows customers to “tap” payments at deli cash registers and inside cabs. And Augme itself knows NFC well, having worked on NFC development since 2007.
So what does all of this mean for mobile marketing? If NFC has been around for years, why do companies like Augme think it will take off in 2011?
It’s simple: by including NFC in its most popular devices, Apple, the company that revolutionized m-commerce with the iTunes store (more than ten billion songs downloaded, and millions more e-books, movies and TV shows sold) is demonstrating confidence in the technology, betting that near-field communications could soon be used to pay for everything from groceries to luxury goods. In the words of one analyst, Apple’s move is a “game-changer.”
An NFC-embedded iPhone or iPad would allow customers to walk into a store or restaurant and make payments straight from their device, like a virtual wallet. There’s no cash or (physical) credit card involved, and as an added benefit, NFC-enabled devices allow for mobile couponing: users can get discounts off individual items, percentages off of total purchases price, and even loyalty rewards and credits for purchases, without having to clip coupons or flash club cards.
“This is an exciting time for m-commerce, with one of the most popular device-makers in the world – Apple – including NFC technology in their products for the very first time,” says Anthony Iacovone, Chief Innovation Officer and Founder of Augme Technologies. “We’re potentially looking at tens of millions of people – via their new iPads and iPhones, and yes Android phones – having access to a widely-available, easy-to-use mobile payment platform for the first time. Customers with NFC-enabled devices are ones that businesses will want to target, and having worked with NFC since 2007 gives Augme and its clients a significant advantage, especially when designing mobile marketing campaigns that incorporate NFC technology.
“2011 will soon be known as the year when mobile payments really took off,” added Iacovone. “The question your company has to ask itself is, ‘Are we working with someone who understands NFC and how it can benefit us?’ If you’re working with Augme, the answer is ‘yes.’”
Apple’s announcement – if and when they officially make it – will be a watershed moment in m-commerce, and we look forward to adoption of NFC on a broad scale. Until then, we at Augme wait with bated breath, confident that we’re ready to embrace and work with The Next Big (M-Commerce) Thing.