Tesco Really Doesn’t Like NFC
Written by Evan SchumanNear field communication (NFC) is retail’s whipping boy these days, with almost every analyst and vendor going out of their way to point out how poorly it’s done and how bleak the NFC future is. And although deep shopper apathy about NFC has justified many of those critiques, major chains—wanting to keep their options open—have hesitated in outright attacking NFC. That’s why a blistering critique from the world’s third largest chain, Tesco, is so potentially devastating.
“NFC was revolutionary 10 years ago but I think it just might have passed its sell-by date,” Lyndon Lee (Tesco Enterprise Consultant Architect) told attendees at a mobile payments conference in London this week, according to a report in NFC World. “Is mobile NFC at the right place, at the right time? I don’t see any real movement or activity. NFC usability is not really revolutionary and, for the general public, is it really that cool? I think the next generation won’t think it’s cool enough for them and they won’t use it. Mobile NFC is unappealing. Contactless cards, I have no doubt about. They work now and they have no difficulties, but mobile NFC is very challenging and not easy.” He also said “Mobile NFC payments have no value to us. It has lack of consumer experience and it is too complicated so I don’t see a future. It is a very stagnant market.”
One of the problems with NFC is that its hype piqued far earlier than did the technology. It was aggressively marketed by various players (Yes, we’re looking at you, Google Wallet) at a time when NFC-compatible phones were rare, when retailers supporting the technology were even more rare and when retail associates properly trained to work with shoppers on NFC were almost non-existent. Add to that the normal tech difficulties of any new wireless technology and you have shopper experiences that were decidedly negative. But that was OK because hardly any shoppers bothered to try.
The pragmatic problem with NFC is that other approaches are now available that deliver some—but not all—of the advantages that NFC promised, while being much less intrusive or disruptive. That was the beauty of PayPal’s and the Square approach. They may have been ho-hum in terms of the functionality offered for the largest chains, but they integrated easily and were relatively easy to use. When it’s being pitched to IT, those are non-trivial advantages.
-Marc
April 29th, 2013 at 9:48 am
Mobie Payment through NFC is another example of over-promise and under-deliver. Whatever mobile payment technology wins will be the one that not only makes it easy for the consumer and cost effective for the merchant, but is also compelling enough to change the consumer’s behavior. Our current payment ecology in the United States is too ingrained culturally and any method that apsires to replace that ecology will need a significant disruptive advantage to move the consumer to change how they pay. At this moment, with over 3500 restaurant locations and untold millions of customers, none of them are breaking down our doors or lighting up my phone with demands for mobile payment options. To paraphrase “it is the consumer, stupid”. Without them driving the adoption, the rest is all “sound and fury, signifying nothing”. So far, all mobile payment solutions are tools looking for a problem to solve.