In the UK we are approaching a key moment as transport operators make decisions on the adoption of NFC to improve the consumer experience
NFC has tried to catch the attention of mobile technology users in a variety of ways; however, the solutions have tended to appear to be on occasion… well, more than a little contrived. Examples include acting as little more than hidden QR codes delivering links to further information or content, to automated linking to Bluetooth connected accessories e.g. for simplified syncing of portable speakers to your phone. So, while NFC continues to provide set-piece opportunities for developers in marketing, it still seems a little like a solution looking for a problem.
In short, the issue remains about whether it can be truly life-enhancing, never mind life-changing, for consumers.
This question is no truer than in the world of transport. Let’s face it, nobody enjoys the daily commute: the queuing; the stress; the wasted time. So anything that improves the customer experience is a goal worth pursuing, and a commercially valuable one at that.
Let’s be clear, ticket gates are only going to become more prevalent, as stations need to monitor ticket use, but NFC devices are smart wallets and readers in their own right, meaning there is no longer a need to stand in long ticket queues or hunt for spare change.
Using devices such as NFC smartphones and tablets, transport operators can, in theory, provide a more convenient and cost effective ticketing service. It is no idle claim to say that this could; and in fact is starting to; transform the daily commute for travellers.
You wonder why you can’t already buy a ticket using your smartphone en route to the train station; maybe buy yourself a coffee using NFC payment technology; swipe your phone at a train station ticketing gate; and board the train, coffee in hand.
In the UK, we are approaching a key moment as transport operators make decisions on the adoption of NFC technology to improve the consumer experience. To really make a difference, I believe we need a collaborative ‘buy in’ to the concept. Yes, some of the technology has been deployed in many UK regions and is being used successfully by hundreds of thousands of travellers already, but what’s needed is nationwide adoption.
In the same way that 4G mobile phone services are only half as useful in isolation, mobile NFC ticketing solutions really make a difference when you can use them anywhere at any time.
That’s the real challenge for NFC adoption. We have had contactless payments cards for some time and their use is increasing – according to the UK Cards Association, 1 in 3 cardholders currently have a contactless card and contactless payments topped £100 million for the first time in March 2014. The total March figure for card expenditure as a whole was £46.4 billion, so even those who have a contactless bank card often don’t think to try it as the first option, instead they’ll look to cash or chip and pin, only using their contactless card if it is specifically pointed out to them. However, this has to be first step in moving people to using their phone as the payment device. Security is still the main reason the public quote as making them wary of the technology.
It is the same in transport: the inconvenience of only using an NFC-enabled smart ticket on your phone for part of your journey outweighs the convenience of that single transaction, and so the traveller is forced to stick to paper ticketing, collecting their tickets at the station, standing in queues, worrying about missing the train. What we really need is for our NFC device to be accepted from home to destination, and back again.
But what about the operators? Surely, there is an opportunity for them too? Operators are now starting to use NFC on a wider basis. Those that are not looking at this today are in danger of being left behind tomorrow.
The technology is here: Rambus Ecebs already enable operators to deliver products through mobile platforms such as NFC smartphones and tablets that are compatible with national transport infrastructure. Additionally, the UK government is backing the use of the ITSO standard for smart interoperable ticketing on new and existing transport schemes including bus, rail, ferry and metro. Since ITSO is in ever wider use across the U.K., and already supports NFC, this means that rather than pockets of isolated schemes and cards, there is the potential for a UK wide NFC-capable transport network.
The news gets better when you consider the rail franchises that are up for renewal in the next few years. One key element of the franchise requirement is the provision for smart ticketing – specifically ITSO-based smart ticketing. With national rail operators all adopting the technology, it suddenly makes much more sense for buses, subways and even ferries, to accept smart, and indeed NFC, ticketing.
So the infrastructure will be in place but, do we have the customers? Well, yes we do. The Oyster network in London has been a lynchpin of the Capital’s transport plan for over a decade now with 60 million cards issued by 2013. However until recently the Oyster system couldn’t integrate with other transport schemes outside of London.
From last year, this has changed and the Oyster network now interoperates with national ITSO schemes such as heavy rail services and council bus schemes. That means you can, in theory, use the Pop Card you bought in the North East of England to travel from Newcastle to London. Cross country, multi-mode travel on one card, made simple by smart and, potentially, NFC.
With half of UK consumers using NFC enabled smartphones (Kantar Worldpanel ComTech, Feb 2014), the technology is already in commuters’ hands. With that sort of customer base, the pressure is on other manufacturers like Apple to adopt the technology as transport operators get set to exploit the technology in their customer’s pockets.
Even those who don’t own an NFC device will soon be able to benefit, with Ecebs looking to launch new technology that will provide non-NFC phones with this facility, potentially creating an opportunity for all consumers to benefit.
From an operator’s perspective, you’d think this would be an attractive proposition: you can protect revenue, capture and analyse data, reduce your capital expenditure on ticketing infrastructure, and more. But the real barrier is not a lack of understanding, or logic: any smart ticketing solution must work for the consumer and provide a seamless and trusted user experience that works across multiple modes and operators. This approach must also provide greater revenues for the operators rather than erode margins. As a collection of regional transport authorities, the UK is a mosaic of different operating companies meaning that there are many commercial issues to overcome, even when the technology is delivered.
Let us not be shy about looking at potentially competitive technology such as Bluetooth LE. Yes, it will have a place, but it is a number of years behind NFC in terms of getting the hardware into people’s hands. We sometimes mock NFC on how long it is taking to deliver that killer app, but think on how long you had Bluetooth on your old pre-Smart mobile phone and wondered what it was for? Now syncing your car to your phone is only a cause for comment if it takes more than 15 seconds rather than “Wow- I can sync my phone to my car!”
Irrespective of the technology, and NFC seems to have finally broken through the volume required to become the de facto choice, it is clear to see that the time for smart NFC ticketing within the transport sector has arrived. More and more commuters will be able to realise the benefits and adopt it into their everyday lives. At the same time, operators across the country will gradually incorporate the technology into ticketing strategies and provide even greater opportunities for customers, with the network in place, mobile operators and handset manufacturers will be well placed to help them take advantage.
Can NFC be the panacea we hope it can be? Yes, but only with significant team work.
