Among the big announcements at the Apple keynote last week was the launch of Apple Pay, a one-tap mobile-based payment solution based on Near Field Communication (NFC). NFC is not a new technology and has been there on many smartphones and accessories for a few years now. However, in India the technology has been used primarily for making two devices talk. But in Japan, the technology is a preferred mode of payment in hotels, shops and even some trains.
With Apple backing NFC and getting lots of partners to sign up for its new programme, the technology could get a big boost in geographies where Apple is a dominant smartphone player. In Europe, Miya Knights, Senior Research Analyst at IDC Retail Insights says: “IDC research into NFC and smartphone adoption, along with the importance of winning over the particularly complex financial ecosystem in Europe will present both a challenge and an opportunity for Apple Pay and those retailers willing to back its benefits.” So what about India? We did a reality check by talking to Amit Bhatia, Head – Retail Solutions, NEC India, one of the companies pushing NFC in the Indian market.
How many years away is India from launching a NFC based payment solution?
Today, the avid Indian shopper has traversed ahead of the traditional retail therapy and has started embracing online and mobile shopping tools. According to Gartner, India has more than 16 crore internet users of which 8.6 crore access internet using their mobile devices and nearly 10% of internet page views in India come from mobile devices. While m-commerce is still in a nascent stage in India, but it is catching up like wildfire due to factors like affordable devices and mobile internet rates. Moreover, high-speed internet and Wi-Fi has also added impetus to shopping through mobile devices. With 4G coming, the trend is bound to pick up in the near future.
At NEC, we have been working on Near Field Communication (NFC) technology for the last three years. In 2013, we did India’s first commercial deployment on an NFC payment solution with PVR Cinemas along with Blackberry. Today, we not only have a strong pipeline but we also have several live deployments in place.
What are the requirements from the tech side?
NFC technology operates on a special chip and application on smartphones. Consumers who have NFC enabled smartphones can use it as a card, by just tapping their phones against NFC enabled payment systems to make the transaction. Not only that, the system also captures the consumer’s details and shopping history for generating loyalty points and data for better customer relationship management for retailers. Retailers across the globe are now leveraging the use of NFC to not only integrate their online and mobile businesses , but also using its power to connect with consumers by sharing information on sales and exciting offers that could be relevant for them, basis the data that the technology collects for them. We offer a complete ecosystem as far as NFC payment is concerned with terminals, cards or mobile phones and the e-money platform that records all the transaction.
What are the obstacles in the implementation of NFC?
While NFC is being widely used globally, it is still in a nascent stage in India. A key challenge in implementing the technology is the readiness of various players to interoperate in order to adopt the same at a large scale. Further mobile service providers and banks need to work together to create a seamless ecosystem for the technology to work efficiently. While NFC enabled phones and devices have been introduced in the India market, they are still not as per expectations. NFC enabled terminals are still not in abundance for the customer to make cashless, card-less payments. But we are aiming to change this with our solutions.
Where are we at the moment?
Today as we speak, continued development is happening on the NFC payment side along with building Value added services, which can complement the solution. NFC has great potential because of VAS (value added services) and secure platform to transact.
With smartphone makers, Internet providers and credit card companies collaborating to offer NFC services to consumers, very soon we will see making our payments, redeeming loyalty points, purchasing tickets and providing identity proof through our smartphones. With NFC, we are soon approaching the time where we will bid goodbye to bulky wallets and the phase of remembering numerous banking passwords. So tap away, to the future purchasing power of NFC.
What has been NEC’s experience with launching an NFC payment solution?
NEC helped PVR Cinemas introduce payment mechanism on the handset of their customers through NEC’s integrated e-money solution using NFC (Near Field Communication) as a technology. The integrated electronic money solution provides customers with servers to manage prepaid transactions, balances and user accounts, and also support for customer relationship management (CRM) functions. PVR saw this use of NFC technology as the something which could be the core of its customer loyalty programme, along with differentiating it from the competition. PVR Cinemas installed this technology across 15 cities allowing moviegoers ‘tap & pay’ for movie tickets and refreshments without using paper or even plastic money.
The solution perfectly fitted the requirements of PVR. By reserving tickets and refreshments in advance, customers can now plan their activities as per their convenience. Waiting time is reduced and they can also enjoy the benefits of loyalty programs through their smart devices. Also, the integrated retail solution allows PVR to streamline processes by using cutting edge and advanced IT solutions to optimise resources and be able to achieve a rise in profit. With the usage of NFC enabled mobile wallet, PVR is able to reduce transaction time by 80% as compared to transactions made through any other traditional
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