One of the reasons I was so disappointed by the recent Apple keynote was the total lack of new hardware. One of the key points we were all looking for was Apple’s NFC strategy. The reasoning was pretty straight forward: It’s game over for NFC once Apple sets the strategy.

I think the marketplace is changing rather dramatically though and the company’s (apparent?) delay has enabled other players (especially Google) to charge ahead.

The previous thinking went like this: Apple = a sexy company. Everyone wants to work with them. So the moment they announce NFC capabilities linked to your iTunes account, everyone-and-their-dog will queue up to work with them. Because it will just work beautifully. And Apple will have arranged a few influential partnerships to convince just enough of the industry to think, “screw it, let’s use their standard”. One example I’ve floated a few times is some kind of tie up with a sports association — like the NBA or NFL, to ensure that every single one of their stadiums offer NFC-ticketing at launch with the iPhone 5. Or Starbucks. Or similar.

It’s a lot more murkier now that I’ve started to see PayPass technology all over the place and now that other incumbents are busy making hay before the Apple gorilla gets stuck in.

Yet I wonder if the majority of the market is either consciously or sub-consciously waiting for Apple to get on with it, still. You can’t ignore them. You simply can’t. Not only are they ridiculously influential, they’ve got the capacity, the reach, the credit card numbers, the loyal customers… not to mention 80 odd billion dollars to spend as necessary.

It’s going to be rather exciting to see what they propose. Meanwhile I’m delighted to see that the rest of the world isn’t standing still. RIM, for example, recently had some of its handsets certified by Mastercard for NFC transactions. I’m hoping we’ll see some stimulating news from Microsoft/Nokia on NFC soon as well.

Meanwhile I think there is an element of wait-n-see. Because if Apple are going a completely different way from everyone else, the market’s going to have to make a determination. Apple still carry so much influence that whatever they announce, it’s likely that’s going to be the way ahead for everyone. Right? What do you reckon?

I filmed a quick video overview with Socialcam to show you what it’s all about. I did a semi-unboxing (I’d already switched on the phone) and then I set about messing around with the included NFC stuff. The chaps at Orange (and Barclaycard) have done a rather nice job of explaining the activation process clearly and easily. They’ve even included a series of test NFC cards to play with so you can get the idea.

The next step is to get my Barclaycard activated and go and use it. As per tonight’s post from San Diego, I’m actually out of the country this week so I’ll get stuck into Quick Tap (ideally at the local Pret in Richmond, UK) shortly.

I have to say the lure of convenience is weighing heavily upon me after having played with the Tocco. Although at £60, the Tocco is most definitely not targeted at my bleeding-edge requirements, the ability to be able to forgo the shrapnel-hunt-shuffle dance at numerous cash registers is filling me with excitement.

A few people have asked me what the difference is between the Tocco with Quick Tap support and the existing ‘PayPass enabled’ Barclaycard I already have.

Well. The answer is simple. It’s not the same.

Yes I will still carry credit cards. And I’ll still have to arse around with cash in the near-term. And, I’m sure, when the Tocco runs out of battery, it won’t be that useful for paying for stuff. But that’s not the point. No. The point for me is that being able to swipe my mobile at a pay point for the most mundane transactions will — ever so slightly — increase my quality of life. And I’m well up for that.

And an ultra quick response? The phone is usually already in my hand, the credit card is not.

Right then — here’s the video overview I made on Friday:

You know the drill, right? We’ve been hearing about this sort of use case for quite a while. If you’d like to buy a diet coke from Pret, you no longer need to fumble about with ‘shrapnel’ (i.e. coins and pieces of paper), you can finally just swipe your phone and have your account debited accordingly.

Brilliant!

As of today, you can now make contactless payments in over 50,000 shops across the UK including Pret a Manger, EAT., Little Chef, Wembley Arena, Subway, Wilkinson and McDonalds. I don’t think it will be long before we’ll see more chains offer support.

Here’s how it works.

First, you need to be an Orange customer. Check.

Second, you need a Quick Tap enabled phone. I haven’t got one of those yet. But I will go and get one. Orange has enabled their best selling handset (the Samsung Tocco Lite) with Quick Tap functionality. We’ll shortly see a whole raft of Quick Tap enabled devices from Orange. Indeed I won’t be surprised if we see the majority of their range enabled with Quick Tap in the coming quarters.

Third, you need a Quick Tap NFC-enabled SIM (which you’ll get with the Tocco).

Fourth, you do need to be a Barclaycard/Barclays customer too. Check. That’s how you top up your Quick Tap account.

Once you’ve done so, you can pay for any transaction up to the value of £15 using Quick Tap. More than enough to buy lunch for you and a few folk at Pret. You can transfer up to £100 a time from your Barclays/Barclaycard account — and you can do it all from the pre-installed Quick Tap app on your Tocco.

The app will also let you view electronic statements — plus if you’re a bit security conscious, you can opt to have to confirm every transaction you make with a PIN number.

I will not be doing that.

Oh no.

I can’t wait to get swiping.

What else do you need to know? Well, I admit that, as a geek, it’s a little bit annoying to have to use a Samsung Tocco Lite handset. I can see why Orange selected that one — £59 PAYG — but really? I don’t know if my geek quotient can handle that.

It makes sense, it really does — launching Quick Tap with a Nexus S or a top-of-the-range Samsung would severely restrict the possible audience initially.

I’m going to pop to the Orange store in Richmond later today and see if they have any in stock.

Barclaycard are giving all users a free £10 credit when they activate their Quick Tap account. That’ll get you started. It’ll also buy you lunch. Plus, you’ll get 10% cash-back on all transactions made with Quick Tap for the first three months. Nice!

It’s good news for MasterCard too. They’re managing the transaction infrastructure (“PayPass”). For extra peace of mind, all contactless transactions via Quick Tap are covered by the same 100% fraud guarantee as standard Barclays and Barclaycard transactions. Nice.

And if you’re wondering about that rather nifty new SIM you need, Gemalto are behind that. They’ve provided Barclays with Trusted Service Management (TSM) operated services which enable the secure deployment and management of mobile contactless payment.

Altogether it sounds like very serious people in sharp suits have delivered what appears to be a robust and well considered contactless payments solution.

As a first step I think this is a fantastic achievement. Good work Orange and Barclays!

I’m going to try it out and I’ll try and do a few videos of it working, it the folks in Pret will let me.

Check out the Quick Tap page for more information. And standby for the marketing onslaught!

UK mobile operator Everything Everywhere, which is a joint venture between Deutsche Telecom’s T-Mobile and France Telecom’s Orange, announced a commercial launch of a nationwide contactless mobile payments scheme in Q2 2011.

via UK: Everything Everywhere announces first commercial NFC rollout during Q2 2011.

Good work Everything Everywhere. I’m looking forward to buying a sandwich from Pret with my handset. Bring it ON!

Here’s what Parmy quoted:

For now, however, Nokia has to endure with the sort of NFC-hype it has never been able to generate, despite its best efforts to invest in the technology.

Ewan over at Mobile Industry Review says that “once Apple integrates NFC into their devices, it will be game over for every other provider in the marketplace.” He points out that it doesn’t matter if there are a good few billion people in the world who will never be able to afford an iPhone — they are outside the United States. And while Apple isn’t commenting on its reported NFC plans, Ewan expects that the commentary from Richard Doherty, director of consulting firm Envisioneering Group, in Bloomberg’s news report today was, one way or another, authorized by Apple.

via Mobile Payments: How Apple Could Steal A March On Nokia. Again. – Parmy Olson – Disruptors – Forbes.

No.

Not when you’ve got almost every analyst, every journalist, every blogger, every outlet of significant influence drinking the Apple Koolaid.

That’s not to say that Apple’s ‘Koolaid’ is wrong. One stroll along University Avenue in Palo Alto demonstrates that the mobile industry is — from the perspective of the Western marketplace — entirely owned by Apple, Apple and thrice Apple. Oh, and HTC/Samsung/LG/etc. And BlackBerry.

The focus is almost totally ‘i’, with Android snapping along behind.

Remember, Android is behind Apple. Just in case you needed a reminder. Yes there are more Android devices being activated in America than iPhones, but that’s just heathen talk. It’s because of Verizon. Right? That’s been corrected now. So pay proper attention to the flawed logic please and stop asking inconvenient questions that are obviously wrong.

Stay with me.

Those who fold their arms, stamp their feet and scream, ‘but Nokia sold almost half a billion handsets last year‘ are failing to grasp the imperial reality and might of the opinion machine.

Apple owns the opinion machine at the moment. Indeed, in recent months we can see that the opinion machine — a kind of wisdom-of-the-crowds style movement fanned by some very, very smart public relations and marketing chaps — has begun to target BlackBerry.

BlackBerry, the wisdom goes, is the ‘next Nokia’. And Nokia? The opinion machine has spoken. Nokia is no more. And, er, the 110-million or so handsets shipped last quarter, just… they … move along. And the fact BlackBerry is the number one smartphone in a gazillion markets? I told you. Stop asking questions.

Abroad doesn’t matter.

In the world of the opinion machine, it’s all about ‘AmericaUK’, where the iPhone rules.

Despite my often epic rants about the ‘Fisher Price iPhone‘, I do own a whole host of iPhone and Apple products. indeed I’m typing this on a Mac Pro Tower and 2x 27″ monitors. I am an Apple fan.

So having said all this, let me get to the key point of today’s post: NFC.

One of the mobile industry’s Next Big Things is definitely NFC payments. The fabled ability to swipe your iPhone at Starbucks. Take note though — paying via an application isn’t any good. It’s all about swiping. This is the bee-in-the-bonet of the mobile industry, especially amongst the opinion machine faithful.

I’ve written before that once Apple integrates NFC into their devices, it will be game over for every other provider in the marketplace. Of course, there’s a good few billion customers out there who, in the short and medium term, will never be able to afford an iPhone. Those people are not relevant when it comes to the opinion machine. The rest of the world is irrelevant. America is a massive market and that’s where the opinion machine lives and is focused.

Alas, whatever the opinion machine says resonates across the planet.

This is why you’ve got a considerable amount of people in India wanting an iPhone. It’s why there’s a huge waiting list for iPhones amongst China’s wealthy middle class. Everybody wants a piece of the Apple joy. It’s cool. The device is cool. The company is cool. America is cool. Yes please.

Are you in need of a reminder just how ‘huge’ Apple NFC will be? You need to check out Pascal-Emmanuel Gobry’s piece in Business Insider (“HUGE: You’ll FINALLY Be Able To Use Your iPhone 5 and iPad 2 As Wallets” — the caps emphasis is from the publication — and yes they did, seriously, prefix the headline with the word, “HUGE”).

The true power for Apple is the ability to exploit and manipulate this influence. For influence, you might read ‘reality distortion field’ — but only if you’re feeling cynical.

The moment Apple formally announce NFC on-stage — and demonstrate the awe-inspiring amazingness that comes with the new improved iPhone 5, the market will be hankering for it.

Everyone with an old iPhone will all of a sudden feel… outta-date.

“What do you mean you can’t pay for your Starbucks with your iPhone 4? How rubbish!”

It looks like some kind of Apple iPhone NFC service is firmly en route now though. The speculation can end. Sort of. You see Bloomberg today reports that some chap by the name of Richard Doherty of consulting firm Envisioneering Group has had conversations with engineers ‘working on hardware for the Apple project.’

One can only assume that Apple have authorised this commentary. It’s that or the chap would already have been silenced by a dozen lawsuits. Apple has sensibly declined to comment to let the opinion machine continue it’s good work.

You can almost see the desperation dripping from the team over at MasterCard. Here’s a quote included in the Bloomberg piece regarding Apple NFC:

Ed McLaughlin, chief emerging payments officer at MasterCard, said the company is “running the world’s fastest payment network, and that doesn’t need to be re-created.” MasterCard sees NFC “as an opportunity to partner with organizations” and already has run NFC payment trials around the world.

Alas, MasterCard, it’s not your game any more. It’s Apple’s game. I’d imagine MasterCard will get a look-in as a payments processor for iTunes provided you don’t do anything to upset the Apple cart.

This quote is an excellent indication of the irrelevance of everybody else as far as the opinion machine is concerned.

Apple NFC — if actually launched — will become the standard in America overnight.

I’m so impressed.

When others have failed — or simply just held trials — Apple conquers.

You can see it working, can’t you?

An on-stage demonstration. An amazed audience of technology geeks with mouths open in ecstasy, cheering while the Apple spokesperson struggling to explain over the applause that the service will roll-out next quarter.

Everyone else in the marketplace who’s been playing with NFC should get ready to occupy the position of also-ran, even if they’ve been working on the technology for years.

Oh it’s going to be interesting, very interesting indeed.

The Near Field Communications (NFC) which O2 had been trialling with Nokia has had some optimistic results. Apparently nine out of ten (90%) of the five hundred trialists said they were happy using the technology.

The Oyster Card is a hassle, and personally I hate the thing. Along with having to remember it, place it somewhere safe, but accessible is highly inconvenient.
Ewan said back in January “Integrating it into a mobile handset makes sense to me” and I have to say, I agree.

The results of this trial don’t come as much of a surprise really, when similar uses of technology have been implemented in Japan for example. I hope that this won’t be the end of the line for NFC technology; it’s taken long enough to get here, and from the results of this small, but useful trial scream that there is a strong desire, and liking towards it.

Eighty-nine percent of the trialists said they were interested in having their Oyster Card integrated into their mobile phone.

I want to know, do we ever expect a release date for this technology to be rolled out completely within London’s transport systems?

Tim Sills is based out of Southern California and one of his bags is mobile payments. He’s got quite a bit of experience in the category so I asked him to write an overview of where we are in the marketplace from his perspective. Here we go. Tim, over to you:

- – - – -

At the beginning of the week we heard that MasterCard had just initiated a contactless payment trial in Canada using near field communications (NFC). And now it was just announced that Visa was testing the waters down under with its own contactless payment trial in Australia. Inexplicably, both card brands are doing the trial for 3 months and on a very limited scale. In Australia’s case, 12 merchants will enable the contactless process for up to 200 consumers.

As many know, this contactless stuff isn’t anything new and was considered to be the best thing to come along since sliced bread a few years ago, at least for the payment card ecosystem. I had the opportunity to work with a major US bank several years ago as they closely followed another NFC trial done at a major US sports arena. Yes, the trial word was just as contagious then as it is now. But this major US bank said they didn’t want to innovate and be out front of the curve and was only trying to keep a finger on the alternative payment methods’ pulse. I likened it to the ‘me too’ crowd…where if a competing bank was to offer a similar solution then they could quickly announce Me Too, I offer this service as well.

But I think the reason for all these trials come down to two key problem areas. First, I suspect the results have been inconsistent. While the headlines blare SUCCESS, the back channel discussions have at times indicated low adoption. I wonder who exactly is participating in these trials and what were the selection criteria? Is it a matter of just having the right model phone and carrier and you’re in? Does the screening process actually take into consideration how integrated into your life your mobile is? Maybe I’m stepping out on a thin limb, but I’d venture to say a good number of the early participants probably didn’t do much with their mobile beyond voice and probably never text messaged. Hence, are they likely to reach for their phone or simply fall back on what’s comfortable and known?

The other problem area is from the merchant perspective. If a consumer has come in to make a purchase, what incremental revenue will they see because of the added convenience of contactless versus a swipe? It certainly means increased revenue for the card brands cause the convenience factor is now between digging for cash or simply swinging your phone, which you probably already have in your hand.

Furthermore, merchant support of the NFC technology would require an upgrade of point-of-sale terminals. I coincidentally happen to perform Payment Card Industry (PCI) security assessments that call for the review of a merchant’s payment transaction environment. The process is extensive and is both time consuming and costly for the merchant. With the tightening of corporate belt buckles and faced with mandatory compliance costs, I’ll creep even further out on that thin limb and say the acquisition and deployment of several thousand additional terminals is going to be pretty much at the bottom of a CFO’s to-do list.

So while the payment ecosystem would love to see a bump in transaction volume and as much as I’d like to contribute to that increase, until the merchants can offset the additional expenses with increased opportunity revenue… we’ll probably see many more trials to come.

- – - – -

Alas, Tim — I think you’re right. Indeed, the example of the bank rolling out a ‘limited’ trial in order to be ready to act when somebody else does, is quite disappointing.

What’s your viewpoint on NFC?

Only a few years ago, some mobile operators were doing their best to avoid getting anywhere near mobile commerce.  Now, as revenue plateaus and the data market is moving swiftly to flat rate — without any innovation — attention is most certainly turning to other ways of making money.

Want to wave your phone at the newsagent to pay for your newspaper?

Dream on.  It’s going to take a 500lb behemoth of a gorilla to step in and sort out the industry.

As it happens, we have that — in the form of First Data, one of the world’s largest merchant account processors.

They’ve come up with a solution that could, theoretically, be adopted tomorrow.  It’s called GO-Tag.  It’s a little sticker that you can put anywhere (think: Back of your mobile phone?) and you can use it much like an Oyster card (the RFID card system used for the London Underground train service).  Swipe at a reader and the relevant balance is debited from your account.  That could be your mobile phone account.  Or bank account, or Starbucks Coffee account. It wouldn’t take much of an imagination stretch for the likes of Vodafone to issue all its contract customers with a little GO-Tag each.  Put it on your phone, your coffee mug, your forehead… any time you use it, transactions are debited from your Vodafone account.

THAT would be excellent.

First Data have published a white paper about this — Contactless Payments: Consumer Trends and Usage Preferences (PDF).  If you’re anywhere into Near Field Communications, this is worth a look.  More about their GO-Tags here (PDF).

(via Payments News)

Nokia says it will cost around 200 euros before tax and subsidies and will ship in some European and Asian markets from the third quarter of this year.

As well as pushing the usual ticketing and mobile wallet angle with the phone, Nokia is also keen to get people sticking NFC tags on their personal belongings, with users able to personalise and edit their own NFC tags with the phone “be it for writing calendar entries or setting the alarm clock”. Nokia’s giving away three sticker tags with the phone for users to play with. Clever idea – instead of waiting for retailers and transport companies to get on with installing NFC infrastructure, why not give individuals a headstart with homebrew applications?

Microsoft said it intends to develop application programming interfaces (APIs) and other support to give mobile makers and applications developers a hand with producing NFC-enabled devices.

NFC is typically associated with mass market consumer devices rather than the more business-y Windows Mobile device – could this be a sign Microsoft is willing to follow BlackBerry and get a little more consumer? Either way, the Sirit deal it sounds like good news for Windows Mobile users.

By the looks of things, it’s going to be a mammoth market at $87 billion worth of mobile ticketing transactions by 2011, as operators start using mobile ticketing to cut down on paper and trim costs, as well as fighting fraud. Apparently, the airline industry will see the benefits with around $500 of cost savings each year once it adopts mobile boarding passes.

And finally – finally! – NFC tickets will also start spreading, with serious uptake happening from 2009. I’m really hoping this does turn out to be the case – no more excuses for lost or torn tickets. After all, Oyster functionality is already being tested on mobiles, why not bring other modes of transport on board too?