NFC technology is the evolution of 2D barcodes and the largely unsuccessful QR code - taking the form of a new smarter scanning facility and enabling mobile users to make payments via a single tap of their device to a point-of-sale (POS) system.
The technology can now be shrunk down to fit within a pre-programmable sticker, roughly the same size as a postage stamp. Even business cards carrying such a sticker can be made 'single use' if programmed via a simple app to transmit their contact details.
Du is entering the market by developing a new range of NFC-enabled SIM cards, which will carry slots for associated mobile apps. The RTA's Nol application will be carried by default, leaving users to decide between a plethora of other banking and retail apps, depending on how much data the SIM can carry.
"Commercially speaking we will roll out the Nol (SIM) card in Q1 2103," Tarik Ghanim, Du's Business Development Director, tells AMEinfo. "We have tested and certified everything and now just adding the final touches for NFC enabled handsets. Currently this includes the Samsung's GalaxyS3 and Galaxy Note 2 as well as four Blackberry devices."
The opportunities for telcos are clear. Users will have the ability to use a phone as a virtual wallet, replacing credit and debit cards. This also covers mobile payments, automatic voucher and coupon redemption and loyalty programs coupled with targeted marketing via location based services.
Real-time issuance and offers to consumers will become a reality for the banks, as customers access loans and insurance on the go, and advertising will evolve with 'smart posters' incorporating NFC touch points, cross-integrating with the offerings of the telco and financial industries.
"Both the business models for cross-industry collaboration and the 'secure element' (for standardisation) have been agreed, joining the fragmented efforts across the industries," explains Tarik Ghanim, Du's Business Development Director. "With regards to handsets, NFC has been adapted by most handset manufacturers where currently there are more than 90 commercially available NFC enabled handsets with many more to come soon."
Phone 5 lacks NFC technology
Notably, Apple's iPhone 5 does not carry NFC capabilities, although Ghanim tells AMEinfo he does not anticipate this will slow down the advancement of NFC in the UAE, adding that Emirati telcos are steps ahead of the rest of the ecosystem, though banks are investing heavily.
"Finally, and this relates directly to mobile payments as it is the primary driver for NFC, Point of Sales (PoS) terminals are currently being rolled out in the UAE with full support from all the major stakeholders," says Ghanim.
NFC-related opportunities have not just hinged on the technology itself, which has been available for a number of years, but because merchants and vendors have needed to collaborate to develop a suitable ecosystem for the technology.
Since telcos and banks are to be transmitting sensitive payment information, it was decided by a France-based consortium, Cityzi, that a Trusted Services Manager (TSM) should sit between the two parties, as well as a separate Testing Authority taking responsibility for end-to-end testing and certification.
Ghanim also tells AMEinfo that for Du, the customer experience element is key: "Apart from the added value that NFC enabled services needs to bring about, a uniform experience across most providers is necessary to ensure that the customer experience is uniform, simple and easy to understand & use."
Given the need for such a cohesive push from across the whole industry, to develop the right infrastructure for NFC technology, we can be sure that it will be well funded and is likely to become a ubiquitous payment method. As we venture further from paper money and coinage, it seems logical to begin using smartphone as a real mobile wallet.