The iPhone 6 & NFC… What Retailers Might Want to Know

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Sep 05 2014, Posted by Carl Davis

There are plenty of rumors surrounding the pending iPhone 6 and Near Field Communication (NFC). NFC is a contactless, Wi-Fi-lite communication technology that is currently supported by many mobile devices. And, some would argue that Apple, if indeed they do release a NFC capable phone, is late to the game. However, I would argue that everyone else was early.

Let’s think about how widespread NFC has been in the last few years. The only real examples are the card readers that allow payment processing by simply tapping the reader with the credit card. From a mobile payment standpoint, the infrastructure is growing, but you hear very little about NFC in other uses.

One reason for the slow adoption is security concerns. While NFC is great in theory, NFC is fairly open to security issues. Encryption of the data transmission is possible, but as far as I am aware, not required in the standards. To name a few of the risks, NFC has the potential for eavesdropping and insertion of data into the transmission to alter the results. No communication standard is fool proof, but NFC is on the easier side to compromise.

Another reason for the slow adoption rate is lack of support from major players, something we’ve seen play out with QR codes. QR codes have yet to truly be accepted due to the major players not supporting it at the core level of the OS, something I’ve argued for a long time. There have been a few attempts, such as Best Buy using QR codes on price tags, which would then bring up additional product information on the consumer’s phone and Lowe’s using Microsoft’s version of QR Codes, Tags, in the outdoor garden area. But, those eventually failed as consumers had to go out of their way and download an app just to be able to use the QR code. Without true support from these major players, NFC could face the same fate.

However, challenges aside, NFC has a huge potential for enhancing customer experiences in retail environments. NFC can speed up payments and check out processes by having the ability to read all NFC tags on products at once. It also has the ability to enhance the customer experience by enabling customer triggers of an interactive engagement in the shopping experience, and much much more. It can even co-exist in a Beacon environment by complementing the beacon and offsetting some of the protocol’s weaknesses. All in all, the potential is virtually limitless for use in improving the retail customer experience.

Looking at what happened with QR codes, it is clear that the major players will need to make NFC support as easy and seamless as possible for consumers to engage via this technology. Apple could be one such major player. And, if Apple does in fact include NFC in the iPhone 6, that means that they will likely have worked out a way to bypass some of the risks associated with the NFC protocols (potentially in a similar manner as they did with the TouchID sensor, storing the user’s fingerprint data in a specially designed “compartment” in a section of the processor). What’s more, if Apple does go the NFC route, this technology could expand rapidly in the marketplace, especially impacting the retail shopping ecosystem.

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