Nothing wrong with retail but public transport could be the key to NFC's success - Mobile World Live

Nothing wrong with retail but public transport could be the key to NFC’s success

25 OCT 2011

Like a late-arriving train, Google has finally announced its first partnership with a public transport provider to accept payments from its mobile wallet. Previously it has been busy signing up retailers to accept NFC-based payments from its wallet . Google is currently working with eight retail chains (and ten brands) but New Jersey Transit is the first operator of buses and trains with whom its users can buy tickets using their NFC smartphones.

Never mind users can buy tickets with their handset at only a handful of locations (New York’s Penn Station, Newark airport’s rail station and on certain bus routes), Google appears to realise the significance of its move. “Transit has been a common element of every major successful NFC effort globally…….,” acknowledged Stephanie Tilenius, Google’s vice president of commerce.

Tilenius is not the only one who has grasped the potential transformational nature that public transport might have on NFC technology.  Orange UK said in a recent interview that it is working with an undisclosed partner in the country’s public transport sector to handle NFC payments. The most obvious candidate is Transport for London (TfL), the city’s public transport provider although the operator would not confirm it.

Bear in mind too that when Isis, the mobile operator-backed mobile payment venture in the US, announced its plans for an early to mid 2012 launch date initially in Salt Lake City one of its first partners was the Utah Transport Authority.

But it is still the retail sector that receives all the attention and so many imagined usage scenarios (and business models) are built around it but there are a number of reasons why public transport can have a transformational effect for NFC. How so? For one thing, public transport, at least in the user’s mind, probably avoids some of the pitfalls that might scare them off mobile payment. Using a mobile phone to open a turnstile in a train station or buy a bus ticket somehow feels safer than a more overtly financial transaction, such as using a NFC handset in a shop. This might not be logical but it might mean public transport has less barriers to widespread adoption.

Public transport might also steal an advantage with the side benefits it can bring. Yes, mobile payments can involve use of coupons, reward points or other special offers but it is unclear that users consider these as essential features. By comparison, an NFC-based system in a train or bus station could deliver real-time travel details such as news about a delayed train alongside buying a ticket. Users might just consider that to be one piece of bad news they don’t want to live without.

Richard Handford

The editorial views expressed in this article are solely those of the author(s) and will not necessarily reflect the views of the GSMA, its Members or Associate Members

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Richard Handford

Richard is the editor of Mobile World Live’s money channel and a contributor to the daily news service. He is an experienced technology and business journalist who previously worked as a freelancer for many publications over the last decade including...

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