A company called Movaluate is distributing reprogrammable Near Field Communication chips, a move that could help erase some of the business and technological hurdles payments companies face. It might also open NFC to a new group of developers.
NFC chips allow smartphones and other devices to make payments at the point of sale. So far, wallets that rely on NFC chips have faced difficulty in getting their systems to work on all NFC-capable phones. For example, Google's Motorola Mobility unit makes several NFC-equipped phones, but these phones run on the network of Verizon Wireless, a company behind the Isis wallet. The phones do not support Google's mobile wallet.
Movaluate's tech bloggers created a programmable NFC tag for a different purpose — to appraise used mobile phones for easier second-hand buying and selling — but its work lays the foundation for other developers to adapt NFC to new purposes.
The company added a disclaimer to the tags, letting developers know the NFC tags are reprogrammable, and the group condones tinkering with the technology.
Developers could create NFC location-based programs, says Brian Yong, marketing assistant at Movaluate. The tags could automatically switch WiFi capability on and off as well as manage many other mobile phone settings.
Movaluate uses the technology to appraise used phones as a way to demonstrate that such phones have value and do not need to be thrown out.
"Almost everyone has a smartphone now-a-days," says Yong. "A lot of this is about awareness. We want people to understand how much these smartphones are worth and what impact they have on the environment."
The NFC tags, sent to consumers for free, also come with a quick-response (QR) code, which Internet-connected phones can decipher by scanning the codes with their cameras.
It's possible for merchants to identify where consumers are in stores by using QR codes and NFC, says Rick Oglesby, senior analyst at Aite Group.
Target Corp. is one such example. The mega-retailer is experimenting with a system that allows consumers to scan QR codes in the store's aisles to purchase items. The retailer can determine from that sale where the consumer was in its store at a particular time. NFC tags could serve the same purpose as QR codes while eliminating steps such as scanning a code with the phone's camera.
Within the payments market, merchants could create incentive programs with the programmable tags, says Dave Kaminsky, an analyst at Mercator Advisory Group in Massachusetts. Merchants could post NFC tags at the front of the store for consumers to tap. The tag would redirect consumers to websites with coupons or could check them in at the retailer for loyalty programs, he says.
Shopkick's mobile-loyalty system works in a similar fashion, in that it sends audio signals through the store's speakers or through small devices that plug into walls. The shopkick app picks up on these signals to detect when a shopper has entered a store or a specific department within the store.
NFC tags are inexpensive, so developers could simply buy blank ones as an alternative to repurposing ones from Movaluate, Kaminsky says.
Movaluate has 5,000 NFC tags to give away. During the first day of its campaign about 1,000 consumers ordered the free tags, says Yong.
"In Korea, NFC is very popular, but in the U.S. it's not very prevalent yet," says Hansoo Lee, project manager of the Movaluate campaign. "NFC technology in general is underutilized" in the U.S., Lee says.
Lee hopes the campaign will allow U.S. consumers to learn how to use NFC and adopt the technology.
Another company, the chip maker Broadcom, is trying to spur adoption of NFC by opening its software to developers that work with Google's Android mobile operating system.
ABI Research is predicting a higher rate of adoption for NFC in phones. It raised its forecast to 102 million by the end of this year, up from an earlier estimate of 80 million. By 2017, ABI expects a total of 1.95 billion NFC-enabled devices to ship.
The Movalulate campaign "could be advantageous because it has both NFC and a QR code," Oglesby says. Bundling the technologies is "a good transitional approach," he says.