First NFC projects could hit next year in retail and transport, says LG

Wednesday, September 28, 2011

The Chilean unit of South Korean electronics manufacturer LG expects some retail stores and perhaps public areas like transport to start experimenting with near field communications (NFC) technology early next year, Sang Park, marketing manager for mobile communications with LG Electronics, told BNamericas.

According to Park, the decision to introduce devices with NFC will depend very much on the operator and how prepared it thinks the market is for this fledgling technology.

NFC allows for simplified transactions, data exchange and wireless connections between two devices in close proximity to each other and is expected to become a widely used system for making mobile payments in the future.

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That said, it is still at the initial stages, and devices are only starting to incorporate the technology. The new versions of the BlackBerry Bold and Curve devices come with NFC.

According to Park, the T-Money project in South Korea is one of the best examples of a major scale NFC rollout.

T-Money is a series of rechargeable cards and other smart devices used for paying transportation fares in and around capital Seoul and other areas of the country. It can also be used in lieu of cash or credit cards in some convenience stores and other businesses. The system is being operated by Korea Smart Card Co, which is jointly owned by Seoul's city government, LG and Credit Card Union.

According to Park, there is potential for a similar project for Chilean capital Santiago's urban transport system Transantiago. In Brazil, LG is working on a bank project that allows basic phones to use NFC to make purchases.

"The idea is that in the short term Chileans can also opt for this technology, and we're going to see a broad range of devices - from the most expensive to more widespread devices. There shouldn't be a 'pain point,' meaning you have to pay more to have this. It's an investment in the user. Maybe the state or the operators will subsidize it," Park said.

NFC operates in a similar fashion to Bluetooth but uses radio frequency and is more secure than Bluetooth, Park said.

Mobile payment already exists in Chile. This year mobile operator Claro launched a mobile application for Samsung Android-based phones for making payments via Servipag, a local bill payment and financial transaction service.

"That trend is going to be more viable in the short term," Park said, adding that the areas of healthcare and financial services hold the greatest potential in the immediate term and underscoring that applications for those areas caught the attention of the Mobile World Congress in Barcelona earlier this year.

"These are very relevant business options. We're not just talking about devices that you can add things on to. There are glycemia and blood pressure readers made specifically for that purpose, for 60 and 70-year olds that don't necessarily know how to use a smartphone," Park said.

Location applications also hold a lot of potential with regards to mobile marketing and have really taken off in Europe.