Bribes Make Citibank India’s NFC Trial Work Well

Written by Evan Schuman
March 10th, 2010

In a major near-field-communications (NFC) trial in India—one lasting six months (ending last month) and involving more than 3,100 consumers, 44,000 transactions and more than 26 million India Rupees (about $573,000 U.S.)—Citibank saw how extremely willing consumers in Bengaluru were to use NFC to make purchases. That is true, of course, as long as the bribes are substantial.

Not only is this the most extensive NFC trial we’re aware of, but Citibank and some key technology partners have issued a 37-page report detailing the study’s results, warts and all. One key partner, for example, was Nokia. It provided the phones that consumers, according to the report, found to be “well below their expectations.” Other partners included Vodafone, MasterCard, Vivotech and the company that prepared the report, Edgar, Dunn & Company.

The sections describing the bribes and how consumers reacted to those incentives were the most interesting. In India, it’s typical for consumers to purchase their phones, as opposed to having them bundled in with their wireless carrier’s services.

The Nokia 6212 used in the trial has a list price of $240; trial participants paid $110. But if the consumers made 12 purchases, they got to keep the phone for free. With six purchases, the phone’s cost dropped to $55. Some retail participants—including QSR Subway, supermarket Nilgiri’s, food and grocery outlets M.K. Retail and Reliance Fresh, Landmark book shops and fashion accessory retailer Shopper’s—offered special discounts, as well.

Some 86 percent of participants made more than 12 purchases and, therefore, got the phones for free. The report dubbed the 18 percent who made exactly 12 transactions “gamers, customers who want to participate at exactly no cost to themselves.” The report even allowed for a modified gamer category, perhaps one that might be called the Wants-To-Be-Really-Certain-Gamer: “It is possible that those with 13-transactions-only were also gamers and made just one more transaction to ensure that they definitely qualify for the full incentive.”

Gamers or not, the change in purchase behaviors noted in the report were swipingly eye-opening. The study used some 32,620 consumers who opted to not participate in the NFC trial (dubbed, logically enough, non-adopters) as the control group, to see if those consumers would have—in that economy during those months—made more purchases anyway. It compared them with consumers who were lobbied to join the trial (solicited-adopters) versus those who simply walked into the store and purchased the phones on their own (self-adopters).

While the non-adopter control group made 7.1 percent in additional purchases (compared with earlier months) during the trial’s six month duration, the number of purchases by solicited-adopters almost doubled (a 96.3 percent increase) and the number of purchases by self-adopters grew a staggering 329.1 percent. When looking at ticket size, the details show an almost identical pattern, albeit not as dramatic. Non-adopters grew their purchase value 11.9 percent, with solicited-adopters growing 55.5 percent and self-adopters increasing their receipt value 231.6 percent.


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