The future, I’m telling you, the future!
[Dave Birch] I think I may have mentioned here once or twice before that stickers are the future. So imagine my surprise when I opened my morning paper to read that:
Barclaycard today announced the launch of Barclaycard PayTag, a new way to pay with your mobile phone. Millions of Barclaycard customers will be offered the chance to make payments with any mobile phone by simply sticking a Barclaycard PayTag to the back of their handset.
Well well. So, basically, if you've got a Barclaycard you can get a companion sticker to put on the back of your phone and if you're paying for something under £15 (soon to be £20) and therefore don't need a PIN, you can just wave and pay.
Now, at the risk of annoying certain of our clients (who I'm sure will forgive me on the grounds of integrity and honesty), I should say that of all of the new form factors that I've played around with, my favourite to date is the Samsung Wave 578 with QuickTap because obviously a fully-integrated NFC solution gives the most functionality. But a pretty close second is the PayPass tag stuck on the back of my iPhone (now passed on to son). I used this for some time, and it always worked perfectly in the UK and US. In fact, here I am trying out, if I recall correctly, in Menlo Park as witnessed by noted industry commentator Scott Loftesness!
There was a problem with it. Well, two really. First of all it didn't have any integration with the phone at all. I would have liked a balance reminder text message in the morning after any day in which I'd used it. And secondly, because it was a prepaid product, it cost money to load and you had to load it by messing about with a debit card (you couldn't do it by bank transfer). Nevertheless, it was easy.
We've been playing around with some plastic, self-adhesive, branded stickers on a couple of the projects we're involved in and I have to say I'm enthusiastic about the possibilities in general, but I've been thinking about them in the particular context of delivering limited services to consumers via phone-mounted stickers as a way on engaging consumers, and trialing consumer services, in advance of full NFC deployment or mass market rollout.[From Digital Money: Stickers are the future, I'm telling you]
I remember that, at that time (i.e., back in 2007), we recommended this strategy to one of our UK clients. They decided not to go down that route because they thought that NFC handsets would be widespread in the mass market very shortly. With the wisdom of hindsight, it might have been better to go down that sticker route and have a large number of customers tapping away already as it would have accelerated the market. But there was another element to the strategy that has to do with the complex relationship between mobile operators and banks. This was laid bare by Garanti Bank a few years ago, when they said (plainly) that one of the reasons why they ordered stickers was to influence their negotiations with the mobile operators: the bank thought that the mobile operators were taking too long to get their act together on NFC and had unrealistic expectations of the share of the margin available to them in the retail payment space. As I wrote at the time
Why did they do this? Well, Mehmet Seazgin, the head of payment systems at Garanti Bank sets the tactic in context: "Since we came up with this sticker idea, which works with all operators and brands of handsets, that gave us a whole new negotiation power with the network operators". The negotiation that he is referring to is about NFC. In essence, Garanti didn't want to cave into the mobile operators and put the application on the SIM. But in the end they knew that they would have to cave, so they wanted the best hand possible before they sat down with the operators. Stickers gave it to them.[From Digital Money: Turkish delights]
Hence service provider interest in stickers, which bypass the mobile operator completely. Now, whether this approach was wise or not it is not for me to say. But I will observe that the degree of co-operation we see in the Turkish market today, where you can walk into a shop and buy a Turkcell handset and then load cards from a number of different banks over the air into the secure element is noticeable.
The Barclaycard initiative, I have to say, wasn't a complete surprise as it was flagged up a couple of years ago, but it's taken some time to get the scheme together.
Barclaycard confirmed it is working on contactless stickers and wristbands in addition to its contactless card and planned NFC mobile-payment rollouts.[From Barclaycard Plans Contactless Stickers and Wristbands | NFC Times – Near Field Communication and all contactless technology.]
Now, remember that despite this initiative, there have been plenty of discontinued sticker experiments, including First Data and Discover in the USA. I remember reading an assessment of the Discover trial a while ago, and it seems that while some people liked it, it didn't seem to have anything compelling about it.
Discover card today announced that it has begun issuing Discover® Zip®contactless credit cards and stickers, targeted at early adopters of its mobile technology. Select Discover cardmembers began receiving contactless cards and stickers in the mail on November 15.[From Discover Financial Services - Investor Relations - Press Release]
I can see that in the US POS environment, a sticker doesn't offer much in terms of speed over a no-signature swipe unless it has some special sauce (e.g., for pop festivals, for example, where the branding of the sticker might be part of the proposition and a "disposable" prepaid product fit with the demographics). But when I go to buy a coffee or a spot of lunch I generally have my phone in my hand and if I can use that instead of a chip and PIN card then I'll leave my wallet in my desk quite happily.
A final point. There are, it seems to me, two different ways of using stickers. They can serve as an interim solution to get customers used to the idea of tapping with their mobile phones at POS in advance of mass-market deployment of NFC handsets. By they also have a "stand alone" niche. In campus, sports, events and similar environments I can certainly see the additional advantage of a POS estate with no PIN pads to get worn or broken and no slots to get gummed up. Buying a beer at Glastonbury will be a matter of tapping your commemorative sticker/ticket/proof of age (see, for example, Touch2ID) on the equivalent of an Oyster "yellow button".
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