In June this year we had part 1 of NFC technology during #TechTrend discussion centered mainly on ‘tap to pay’ and why it did not pick up well in the matatu industry in Nairobi.
We set-up part 2 of the discussion on NFC technology application focussing in loyalty and payments beyond use in the matatus.
Big players in the industry as well as startups are continually centering their businesses around this technology. Over the past few months we have seen a few big players leveraging on the technology notably; Google: Android Pay, Apple: Apple Pay and Samsung: Samsung Pay. You can find summarised details on the above developments on this blog.
Near field communication (NFC) is a technology that enables smartphones and other devices to establish radio communication with each other by touching the devices together or bringing them into proximity to a distance of typically 10 cm or less.
We kicked off with the question whether Africa is ready for NFC. There were several opinions to this question. First it was noted that NFC is a worldwide trend not only unique to Africa. It might kick-off in a great way once people get accustomed to its use. It’s however only accessible to cluster of people who may afford phones that are NFC enabled. A lot of people are still skeptical about using cards. There are however trends that are arising that people use a sticker behind their phones, wristbands and other wearables.
The other obstacle to the uptake of the technology is the uptake of POS systems to include NFC technology on a wider scale. Infact one of the developers noted that whilst rolling out his solution there was the need of a NFC reader to connect to a computer which proved cumbersome to one of his clients.
The ‘developer problem’ also arose. This is where enthusiastic developers are rolling out products but they end up pushing the technology instead of solution. The potential users therefore end up scared by use of terms like “Tap to Pay”, “NFC enabled” just to name a few, which they easily argue that it’s not secure since if anyone picks their card they can easily “tap” out all the money. This is also a major reason why card payments on matatu has not picked up at large scale even though high interest rates being charged to the matatu owners was also another reason.
Card Planet Solutions (incubated at m:lab East Africa) who recently launched their product Paykind; gave their experiences over the years and advised startups to partner with banks for legal purposes and to watch out for stakeholder problems e.g under 18’s having ‘bank’ accounts. This was after Lipacard did their great presentation showing their cashless wallet for students for different learning institutions.
Shopofficer a Mobile CRM for SMEs (Still at beta stage) also did their presentation showing how they integrate NFC technologies to offer loyalties solution to merchants. Using NFC is a new approach compared to barcodes or QR readers. One of the challenges noted with implementing the same platform for different merchants was the different views of the value of money amongst the stakeholders. e.g When a lady spends 500 at a salon it can be equated at 5 points while the same amount might be 0.5 points at a high-end cafe.
Watch out for the last (Part 3) NFC -Technology Techtrend in November as we plan to focus on home automation.