NFC for my mobile apps – how much does implementation cost and is it difficult?

NFC has been around since 2003 but it´s not until now that technology and adoption are ready for commercial deployment. Google plans to embed NFC in the Nexus S, RIM in all their new devices and Apple want to equip the iPhone 5 with an NFC chip, despite rumours they would not. Nokia launches a series of devices including NFC, starting with the C7 and most other handset manufacturers will include NFC in their devices within the next 2 years.

According to Wikipedia: “Near field communication, or NFC, is a set of short-range wireless technologies, typically requiring a distance of 4 cm or less. (...) This enables NFC targets to take very simple form factors such as tags, stickers, key fobs, or cards that do not require batteries. NFC peer-to-peer communication is also possible, where both devices are powered.”

The technology will enable lots of new exciting mobile interactions. The main focus is on mobile payments. A complex eco-systems and infrastructures of mobile payments makes it more likely that the utilization will be in other areas first such as loyalty cards, identification, as travel tickets, enterprises and potentially micro-payments for vending machines.

What is the cost of implementing NFC in your mobile applications?

Android and Symbian already support NFC. iOS and other mobile OS are expected to add support this year. This means the implementation of the service on the application side is fairly straight forward. Make a call to the API to read a Tag (the target device) and then there is an open communication channel between the two NFC chips for whatever the desired interaction is.

Examples could include

a)      Identifying a certain customer as having been in the store

b)      Registering a discount coupon from a mobile app in a store

c)       Checking in at the airport

d)      Paying for a buss, taxi, tube, etc if the application is connected to a backend-server which supports this

e)      And a myriad of other things

This means that the cost of implementing NFC in an application is very small compared to the cost of setting up a backend which could be hundreds of millions for a full scale payment platform that replaces credit cards. A simple NFC solution which reads an

NFC chip once to authenticate that the user has been in a certain store or redeemed a voucher could cost as little as 10-20.000 Euros to implement.

So what’s next?

During the coming years we will see thousands of different applications including NFC. Some of those will be groundbreaking and others will quickly be forgotten. Banks, retailers, transportation businesses, fast food restaurants and event companies will all launch pilots and some full scale implementations but it’s likely to be an evolution that replaces plastic cards over time rather than a revolution.

Golden Gekko is currently working on NFC trials with a couple of clients so please contact us for more information: info (at) goldengekko.com