In depth: NFC and QR codes go for gold at Olympics


From NFC to QR codes, London 2012 is setting the scene for the mobile ecosystem to come

By Heather McLean

This month's Olympic Games in London is showcasing not only the UK capital and the country's many talented athletes, but also many of the sexiest new technologies for mobile.

London 2012 has become an opportunity for near field communications (NFC) and 2D barcodes, of which QR codes are the most well known, to be trialled, experimented with, and launched into the user's psyche.

Visa is heading up a showcase of NFC with its payWave mobile payment application, using Samsung Galaxy SIII smartphones, in association with Lloyds TSB. The showcase involves over 800 triallists who are able to use the phones to make purchases at the 140,000 contactless payment points around the UK.

Trial and errorThis Visa-branded showcase will never launch commercially; it is simply a publicity and processes exercise designed to show those partners that need to be involved in a project such as this, plus the press and the public, what NFC involves and can bring to the mobile table.

Andrea Dunlop, Visa's mobile initiative manager for 2012, told Smart Chimps: 'Banks and mobile operators will be the ones we will see launch NFC services commercially. The reason we decided to do this showcase ourselves was we were really struggling to get NFC moving forward back when we decided to do this; we wanted to do this to get it moving to show the banks and operators how good it could be so they would then bring their projects forward. However, that was 18 months ago, and they are now moving much faster.

Although the technology works now, the hard part of the NFC equation for banks and operators is the business processes, Dunlop states. 'The business processes are horrendous,' she explains. 'You have to deal with security, banks, mobile operators, handset manufacturers, TSM bureaus to personalise the SIM; all these entities are incredibly complex. Trying to pull all that in and get it as slick as possible takes 18 months to two years to get going, or even longer if you want the system to be really slick.'

She adds that the Visa, Samsung, Lloyds TSB showcase really highlighted many of these business process issues. 'The time we need in the banking arena to make these products as secure as possible is a lot; banks don't cut corners in testing and they need products to be very slick. Whereas Samsung didn't want to disclose the handset we would be using until the last minute, which meant there wasn't as much time for testing as a bank would normally require.'

As for when we will see more NFC in the market, Dunlop reckons that following this Olympic showcase, it may be a job for 2013: 'I don't think you'll see any movement on commercial NFC this year, but you'll see a lot more NFC launches next year. We are only on the cusp of this; we have got way more to do and get stressed over. You're looking at three to five years for mass adoption of mobile NFC services,' Dunlop concludes.

NFC land grabJuniper Research's Dr Windsor Holden comments that NFC is seeing the beginning of a land grab for mobile operators looking for additional revenue: 'Speed is of the essence here. In the context of NFC retail payments, an NFC interaction between consumer and retailer is not necessarily mediated by the operator; the mobile network operator's role in this market could be said to be key, but not necessarily essential. Thus, if they are not to lose out to other sets of players (most notably the OTT providers), it is imperative for operators quickly to establish themselves, both physically, in  terms of getting the product out there, and socially, by creating awareness of the product within the public psyche. Unless they do, they may find that the NFC wallet war is, for them, over before it has begun…'

On who is doing what and how large, Holden says in his blog: 'On both sides of the Atlantic, operators have – rightly – gone for scale. In the US, Isis, the mobile network operator-led consortium of T-Mobile, Verizon and AT&T, is expected to begin consumer trials in Utah and Texas later this month …. triallists will be able to use three NFC-enabled handsets – the HTC Amaze 4G, Samsung Galaxy S II and Samsung Galaxy S Blaze 4G – to redeem coupons and make contactless payments in-store. Assuming the trial responses are positive, ISIS, which has banking partners including American Express, MasterCard, Visa, Chase and Capital One, is then expected to deploy services nationwide.

'In the UK, there is the wonderfully named Project Oscar, a joint venture between Telefonica, Vodafone, Orange and Deutsche Telekom. It was envisaged that Oscar would essentially provide an NFC payments 'one stop shop' for third party merchants and advertisers. It was originally hoped that Oscar would be up and running earlier this year, but objections from Hutchison (the only operator not invited to the party), Google and PayPal led to antitrust investigations by the European Commission. While this meant that Oscar was not in place by the time that the Olympics came to town, a report in the Financial Times has suggested that the EC will shortly approve the project,' Holden notes.

QR time!As for QR codes, these increasingly popular marketing and branding devices are having their higher capabilities showcased at London 2012. Most people in the UK that know of QR codes think of them simply as a device for URL placement; however, Mike Wehrs, CEO at ScanBuy, a provider of mobile QR code products, says that the Games has become an opportunity not only for the public to become more familiar with using QR codes, but for business and brands to learn about the more complex attributes of these interesting little matrix squares.

ScanBuy is providing all the QR codes and back end management for the London 2012 Olympic Committee. Each day the Olympic Committee's daily magazine publishes five to six QR codes that readers can scan for details such as race updates and schedules. To cover its Olympic usage, ScanBuy has upgraded its systems; its normal scanning rate on an average day is three scans per second, but for the Olympics it has upgraded this to be able to handle 400 scans per second.

Wehrs states that QR codes are powerful tools when used to provide a menu of choices. He explains: 'We make the QR code do more; we can create menus of options for users to choose from, including videos to view, FAQs and customer support lines. Providing higher capability QR codes makes them smarter, so that the code can notice if the user is on an iPhone or an Android device, and can, for instance, give the user the correct app for that device.'

QR code usage is on the up; ScanLife, ScanBuy's QR code processing engine, saw 13 million scans processed in the first quarter of 2012, a 157% increase from more than a year ago. Wehrs sums up: 'I would say that this Olympics is not QR-crazy, but that it is helping us showcase the capability of QR codes to some extent, without going overboard. The next Olympics will see a lot more usage of these technologies, such as QR codes and NFC tags.'

Smart Chimps thinks: London 2012 is the beginning of an onslaught of mobile technology that has been building up slowly over the last few years, but is now ready to become something we can use in our daily lives. As one of the triallists in the Visa payWave and Samsung showcase of NFC, Smart Chimps is having a great time buying sandwiches at Pret and Costa, and soon will try out the technology at the Olympic park itself. As Visa's Andrea Dunlop says, this is just the start of the revolution; it will be extremely exciting to see what things look like in Rio!


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