Will you give up cash and privacy in exchange for making mobile electronic payments from a smartphone? The tap of the phone on the Near Field Communication (NFC) terminal reader will provide manufacturers three important pieces of information that will help forecast product demand: user name, location, and intent.
It turns out there are close to one million readers supporting Vivotech NFC payment software and readers installed in stores worldwide, just waiting for transaction-ready phones. Vivotech founder Mohammad Khan estimates his company holds 70 percent market share worldwide for NFC payment software and readers, which supports Google Wallet at point-of-sale terminals in retail stores.
Google (Nasdaq: GOOG) licenses Vivotech's technology to enable payments and conduct transactions, Khan said. The software lets consumers download plastic credit cards into their NFC-supporting smartphone. Khan calls it the "one-tap checkout" for everything from point-of-sale (PoS) terminals to smart posters that enable consumers to download coupons on to their phone or even make purchases. The first pilot for smart posters occurred in Taiwan in February 2007, for MasterCard.
Banks will use Vivotech's over-the-air (OTA) technology to securely provision credit, debit, prepaid, and other accounts to mobile phones for use through hundreds of thousands of Vivotech NFC readers and NFC-enabled media, such as smart posters. The software aims to give banks control over the OTA provisioning process and ensures security from behind their firewall to Google Wallet software located inside the mobile phone. But is it really that secure?
Vivotech's long-term strategy turned it from a pure play technology manufacturer into a mobile advertising and marketing company as it makes plans to build out services supporting NFC for Google. As advertising and marketing services continue to evolve, ads gain value when linked with offers and coupons. It's important to get the consumer interested in trying the product. That interest can have an impact on the price of products, influenced by recommendations and reviews on social sites.
NFC devices continue to drive interest; mobile payment network Isis recently got an infusion of $100 million from Verizon Wireless, AT&T Inc., and T- Mobile USA. The carriers created an alliance to grab a piece of the market for mobile commerce. The hardware and software to support the technology and transactions should launch in Salt Lake City and Austin by mid-2012. Isis will compete with Google's Wallet offering on a variety of phones from Google, Samsung Electronics, Research in Motion (RIM), and others.
As for Vivotech, the company began in 2002 supporting wireless transactions for MasterCard in Orlando. Installation in Dallas followed the next year to support MasterCard's and Nokia's mobile payment program, as well as in Phoenix for American Express.
By the end of 2012, most smartphones will become NFC-enabled. Will you buy one for personal or business use, and will your company tap into the data from NFC purchases to forecast demand or launch advertising and marketing programs?