The NFC Experiment

The NFC Experiment

Summary: Why do you run experiments? Is it right for someone who has had an experiment fail to act as though it’s succeeded and plan to commercialise the process?

TOPICS: Mobility

Why do you run experiments? Is it right for someone who has had an experiment fail to act as though it’s succeeded and plan to commercialise the process? That’s what’s happening with NFC.

Mobile World Congress was alive with interest for NFC. There were new NFC handsets, there were talks on how it was a great new future, how it was going to be a fantastic partnership between banks and operators.

It’s a shame that MWC moved from Cannes to Barcelona, actually a shame for many reasons, but from the point of view of this article it’s a shame because if the delegates had travelled 35km down the A8 they could have visited Nice rather than being told about the success in lectures. What they were told was that it’s a huge success, a fantastic partnership been the operators, the banks and the transport companies. And at that level I grant you it’s a success.

Indeed Orange gets very upset if you use the word “experiment” to describe the CitiZi project in Nice. It is apparently a roll-out. The time for experimentation is over and the have sold half a million handsets. A good example of an experiment is perhaps the work O2 did with Nokia and London Oyster. There users loved the technology, although that was a trial to make sure it all worked not consumer adoption, so the trialists were all given free money to spend in the electronic wallet. Free money? What’s not to love?

So what would the delegates have found if they had travelled the 500km from Barcelona to Nice? Well what they would not have found is anyone using their NFC phones. Orange might have sold half a million of the things but that doesn’t mean they have active CitiZi accounts. I went into the Orange shop in Cap 3000, a huge Westfieldesque shopping centre in Nice.

I bought a microSIM for my Nokia 710. I could have paid for it using my contactless Barclaycard but not with my CitiZi phone. Even in the Orange shop in Nice they don’t take that as payment, despite having the hardware. I asked the girl who sold me the SIM about CitiZi, she said it was an “Experiment”, she obviously didn’t get the memo. And that it came with a wide range of phones for free, including the Samsung Galaxy II but that most people didn’t take up the option. People never asked for it and sometimes she forgot to offer it. That Orange “half a million phones”, needs examining. It’s spread across ten manufacturers so even if it’s only one phone per manufacturer that’ 50,000 phones. Nokia sells a million phones a day so 50k over a couple of years isn’t going to make anyone in Espoo smile. Beyond this we need figures and trends for usage. There are 11 million contactless cards in peoples wallets in the UK yet the banks have never published any figures for how often they get used. I did once get a figure for CitiZi usage, about two years ago it was so low it would take 1000 years for the inhabitants of Nice to use CitiZi as often as Londoners use Oyster in a day.

The business cases for NFC are strained at the least and many of them rely upon consumer pull. Visit Nice and you’ll see that pull doesn’t exist. What we should learn from the Nice experiment is to give up.

Simon blogs about Easy to use and big button mobile phones at Fuss Free Phones.

Topic: Mobility

Simon Rockman

About Simon Rockman

Fuss Free Phones: Simon Rockman: Simon has been in the mobile phone industry since Motorola was the top dog closely followed by NEC.

He's been the owner and editor of What Mobile Magazine, the editor of PCW and a senior director at Motorola and Sony Ericsson.

Today he focuses on Mobile Money and his passion of mobile phones for older people. he runs

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  • My experience of using contactless cards has only been in McDonald's and Caffe Nero. In no case has it been quicker - in the first place you have to tell the server that you want to use the contactless card. In Cafe Nero they take the card off you and do the transaction; in McD they hunt around for what to do and then you can tap your card. If you don't get the sequence right, you have to start again. Chip and Pin works well by comparison in those environments now that everyone does it - maybe it'll be like that in the end with contactless.
    As for using NFC phones, I asked in the Orange Shop which of the two smart phones I was interested in has NFC - both, I was told (not true in fact). A long way to go...
    In the end, I think the cost of the transaction (now that we have a MNO and possibly a TSM in the loop as well as an acquirer/processor and at least one bank) will prove too expensive for widespread use of NFC phones as a transport ticketing medium - I think people will stick with smartcards - but I can see a great role for a NFC Phone with an app that allows journey planning, real-time "nextbus" info, ticket purchase and writing it to a smartcard
  • The problem with ticketing is that the standards require three transactions a second. The best SWP in an NFC phone can do is two. It's 50% too slow unless you buy new, expensive, superfast SIMs.
    Simon Rockman