An area of technology that is getting an awful lot of attention right now is a cool thing with a horrible name. NFC or 'Near Field Communication' promises much and actually looks like it will deliver. The concept is simple enough, your smartphone will talk with devices you come into contact with and manage transactions with them. The most obvious example is shopping.
Now most people can pretty easily grasp that you will pay using your phone by simply pressing an icon or entering a pin number at the checkout. In an Apple store the man or woman that usually carries that portable cc swipe machine will instead simply ask you to confirm your name. You will appear to him on his iPhone and he will then transmit the charge to your phone and you will press 'accept'. Easy.
NFC services already exist in advanced markets in MEA and APAC region
But this is not the good bit of NFC. What I just described is convenience. The really good part of NFC is what it’s going to do with how you manage your money. You see right now when you go into the store you make a decision on what credit card to use. But which of us is really any good at understanding which credit card is best except for having a rough idea on how much available credit is available? Now what NFC will do is to allow you to auto set up your smartphone to select the ‘credit card’ (of course there is no physical card anymore) that offers the lowest rate of interest. You will also be able to set up your smartphone to decide which card to use for what types of purchase, i.e. airline tickets (United MileagePlus Visa Explorer) or concert tickets (Ticketmaster American Express) for example.
Think that’s cool. Well how about those pesky 'Fast Trak' tolls when you’re out driving? NFC on your smartphone will automatically pay those for you and of course charge to the best card. Parking meters? Car parks? No need for coins or to insert your card in the meter. Your smartphone will pay for those too. Trials for that are already operating. Walk into a flower store, pick up the flowers you want and the person who works there will ask your name, tell you the price and ask you to confirm the sale. That’s it.
Think this is good? OK now for the best part. All these NFC transactions are going to start building you a very detailed map of what you buy and where you buy it from. Over a year or so you will be able to know what matters most to you in terms of spending. Your smartphone will then start to offer your business out to vendors. Like this for example;
"My name is Roy. Last year I spent $1200 on rental cars. Attached are my records showing my purchasing patterns, meaning what cars I like and the times I most need a car. If you would like to bid for my business please confirm what status you will offer me, what discounts and what car types."
Your smartphone will send that kind of data out, if you want it to, and it will work with the rental car companies who will have software programs that bid for your business. If you historically want a car during a quiet period for them you get a discount. If you show that you often take the fuel option but return 3/4 full – you get a discount.
You will then be able to either read through the bids or just select the one that most matches the criteria that your phone knows are important to you. When you next go to the rental center the car will be waiting for you and to exit you will simply drive up to the booth and smile at the camera to let you out. The rental car company will already know who you are from your phone when you walked in. All they will need to know is that it’s you from the camera detection.
Now imagine banking. Every month you loan them your money for FREE. All those deposits they get from us, they earn money on them. Every HOUR they have your cash it is working for them. What do we get? A lousy interest rate raised on a horrible minimum period of deposit. If you go overdrawn they charge you. Fair enough but in return they should pay us for every moment they have our money. In the future our smartphones will switch our money between accounts and banks based on the interest rates they offer. The switching will be automatic and payments out will switch as necessary too.
Rapid increases in mobile processing power, fast and ubiquitous cloud computing with ambient connectivity will make all this possible. My forecast is that it will take 5 years but it might be much sooner. There has really never been a better time to be in technology.
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