New mobile technologies are profoundly changing the way in which people and businesses buy and sell. Mass-market smartphones, with touchscreens, fast connections and an array of feature-rich applications, are extending the convenience and interactivity of online commerce into the physical bricks and mortar world.
Hundreds of millions of people now have the entire Internet at their fingertips wherever they are. As they move around, consumers use smartphones to look up product and service information, download and store vouchers, search for merchants, explore transport options, run price comparisons, buy tickets, purchase products and order services, rather than waiting in line.
At the same time, retailers, transport operators and other service providers are beginning to use mobile technologies and services to both improve efficiency and create a more compelling experience for their customers.
The role of NFC in digital commerce
Easy-to-use and versatile, Near Field Communication (NFC) is a contactless radio technology that can transmit data between two devices within a few centimetres of each other. Mobile phones are increasingly being equipped with NFC capabilities, enabling an array of compelling new digital services.
Combining NFC with mobile connectivity offers many benefits in retail, transport, payments, access and other sectors. For example, travellers could use a mobile connection to buy a train ticket and then use NFC to validate the ticket when they reach the station. Or a retailer could use a mobile network to send a customer a voucher, which could then be redeemed using NFC at the checkout. In each case, the SIM card inside a mobile handset can be used to secure sensitive data needed to operate the service.
In addition to NFC a host of other technologies are available to the service provider and consumer. Host Card Emulation (HCE), Bluetooth, iBeacon and tokenisation amongst others, all have a place in providing the market with the versatility required to create a ubiquitous consumer experience.
Retail – interactivity everywhere
Working together, secure mobile and contactless connectivity can bring online-style interactivity to the high street and the retail park, bolstering local economies and social cohesion. For retailers, mobile technologies can enable greater automation, cut costs and make it easier to sell a broader range of products and services. Many retailers are now beginning to use a combination of mobile and contactless technologies to enable:
- Engagement with their consumers in and out of store. For example, through the delivery of relevant and timely offers to consumers’ mobile phones.
- An interactive in-store experience using NFC-enabled kiosks, posters, signage and other informational tools that can engage the consumer without distracting them from shopping.
- Straightforward payment, coupon redemption and accumulation of loyalty points at the point-of-sale.
The goal is to give consumers a richer experience, encouraging them to stay longer in a retailer’s store, become more engaged with the brand and ultimately spend more money.
Transport – easier and more convenient
Mobile technologies and services can make it much easier and more convenient for both commuters and occasional travellers to use buses, trains, ferries, airplanes and other modes of public transport. Transport operators can use a combination of mobile and contactless connectivity to make it quick and simple for passengers to buy or modify tickets and access up-to-date personalised information.
If individuals can buy a digital ticket via a mobile connection, rather than a ticket booth or a machine, they no longer need to queue. Moreover, NFC can be used for fast, accurate and transparent ticket validation. Transport operators can also use mobile connectivity to send passengers personalised alerts, notifying them of delays on the route they regularly use or of a new service that could get them to work faster.
Enabling online commerce and finance
Mobile technologies and services can make online commerce easier and more secure. Credentials stored in an individual’s SIM card, for example, could be used to authenticate a buyer making an online transaction, reducing the likelihood of fraud and improving the consumer experience. In such a possibility, a consumer could simply enter a PIN number into their mobile phone to complete an online transaction, rather than having to key their card details into the merchant’s web site. Secured in this way, such a transaction may potentially qualify as “a card present” transaction, reducing the interchange fees charged by the relevant payment network.
Mobile technologies can also be used to make financial services, such as money transfers, insurance, loans, savings and international remittances more accessible and more affordable. Mobile operators can use their existing airtime distributors to enable consumers to put money in and take money out of a virtual bank account. The consumer can then use their handset to securely send and receive money. In this way, digital commerce can increase financial inclusion and strengthen local economies.