All the players involved in mobile payments via Near Field Communication wireless technology should not focus on NFC as a technology but as “a lifestyle choice,” Peter Vesco, senior vice president of payments for German telecommunications company Deutsche Telekom, said today at the Open Mobile Summit in London.
“We need to create a real value proposition for consumers,” Vesco said during a panel entitled “The Age of M-commerce.” “We have to take care not to burden the customers, instead teaching them to redeem vouchers and use smartphones. It’s very easy to convince the younger people, but the marketing for the new digital commerce needs to be very clear to distinguish between different groups. It is not one size fits all.”
NFC has been touted for several years now as a way for consumers to pay and redeem coupons and loyalty points with a wave of their phone past a wireless reader at a store checkout counter. But some experts believe the future for NFC remains unclear. Dan Schulman, group president at American Express, said he sees promise in mobile payment schemes that combine smartphones and cloud computing or smartphones and personal identification numbers.
“I do believe NFC has the inside track right now,” Schulman said. American Express is involved with the Isis NFC payments initiative. “NFC involves changing all the POS terminals. And there are not enough phones with NFC chips in them yet. But people change phones every 18 months or so. It’s when all POS terminals and smartphones come with NFC chips. So NFC is still four to six years away.”
But NFC is not just about payments–the technology must offer consumers value beyond the convenience of using a smartphone to make a payment, Schulman said. “You need two-way communication to transfer coupons and deals,” he added.
The free-wheeling panel discussion covered a range of mobile commerce topics. The panel touched on one of the hottest topics today in not just m-commerce but commerce overall: “showrooming.” Showrooming is when a consumer armed with a smartphone compares prices and reads reviews on his smartphone while in a store and winds up buying a product not in the store but online or via mobile at a competing web retailer.
“The process has been going on for decades,” said Simon Burke, chairman of Hobbycraft Group Ltd., a U.K. multichannel retailer of arts and crafts. “Before Hobbycraft I worked for a toy store, and we quite commonly had people come in, check out what is available, get ideas, and go away and buy products somewhere else. One of the first reactions of retailers to consumers comparing prices on their phones was to ask how can we jam the signal. Retailers have to sharpen up. They have to keep track of those prices.”
Like showrooming, social media is another hot topic. And social and mobile have made for a potent mix. Half of all Facebook users access the social network on a smartphone, the company says. And there are mobile-focused social networks like Instagram and Pinterest. Mobile social activity could open new doors in m-commerce, panelists said.
“We’re overwhelmed with the amount of information coming our way from social networks,” said Schulman of American Express. “If you can curate Facebook Friends’ recommendations, for instance, it’s a filter for us to know what’s hot and what’s trending and what people like. Pinterest is a perfect example of curation. It could become e-commerce if you could purchase straight through Pinterest and these curation sites. I know my friends like it and I like it, why not just buy it right there?”
These are the kinds of things executives in m-commerce need to be thinking of to advance mobile shopping, said Burke of Hobbycraft. It can’t be business as usual, he said.
“You should not look to the past in order to navigate the future,” he concluded. “What they got wrong initially with online shopping was replicating a shop. Quite a lot of the talk with what new technology can do is based on what old technology has done. If you look back, the real winners have been the people who have done something that has not been done before. Mobile will overturn a lot of paradigms.”
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