Supporting Local Payments on a Single Global Platform





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Why the rise of BLE doesn’t mean the end of NFC (and vice versa)


October.03.2014 0 Comments

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Commerce is going universal. As online, mobile and physical shopping increasingly mesh together, merchants are seizing their chance to deliver a holistic customer experience via multiple channels and mobile devices. One way to go about this strategy is by taking advantage of hyper-local commerce, according to Mahindra Comviva, via technologies that some players like Apple and PayPal have already put into action. In a recent whitepaper, the company highlights the inner-workings of BLE technology, and how it gives compelling power to the merchant while benefiting (and not so much disrupting) the consumer’s shopping experience.

HYPER-LOCAL COMMERCE ON THE RISE

Consumers around the world are using discovery-based apps like Foursquare to find restaurants and other venues – but location-based technology can serve a greater purpose, especially for merchants looking to leverage multiple channels to create that holistic shopping experience consumers crave.

Hyper-local commerce is both powerful and compelling to merchants in that it allows them to identify a customer’s location, deliver timely and relevant coupons, discounts, advertising and more, according to the whitepaper. To execute this, local-based technologies like cell-tower triangulation, GPS, and the increasingly popular WiFi Direct, NFC, and BLE.

BLE: THE “POSTER BOY” FOR LOCATION-BASED COMMERCE?

No single location-based technology has seen widespread adoption yet. However, Bluetooth Low Energy (BLE) in particular has shown “considerable promise in being able to rise about those aspiring to be the poster boy for location-based commerce,” says Mahindra Comviva. The technology, marketed as “Bluetooth Smart,” was intended to locate unique and previously unheard of applications in industries including healthcare, fitness, security, and home entertainment. BLE today maintains a similar communication range as traditional Bluetooth, except its wireless data transfer uses “considerably less power.”

BLE first came about in mobile payments when Microsoft announced that it was experimenting with both BLE and facial recognition technology combined to “create a zero-effort payment system.” And while some initial proponents of BLE considered it a replacement for NFC, it is now increasingly being seen as “another step along the road to frictionless interactions between merchants and consumers,” and is already integrated with most major smartphones.

Some key players like Apple (iBeacon) and PayPal (PayPal Beacon) have already have put the technology into action. Meanwhile, the number of retailers experimenting with the technology continues to grow – Duane Reade, American Eagle, and Belgian supermarket chain Cora are just a few of those who have taken interest in effort to improve customer experience.

One example of a BLE demo conducted to do just that occurred in September 2013, when iBeacon technology was set up at a U.S. baseball stadium, The Citi Field. The app used detects when consumers reach the stadium, automatically populates a stadium-specific ballpark guide, and automatically displays barcodes for tickets purchased online when a consumer nears ticketing areas. During the demo, the app specifically offered features like directions to seats, automatic Facebook check-ins, special deals, coupons, and more. Afterward, the success of the demo prompted Major League Baseball to install iBeacon in 20 stadiums.

THE BLE ENABLED RETAIL EXPERIENCE

In the next 5 years, BLE shipments could create a 60 million unit market by 2019, according to a report published by ABI Research. In addition, the Bluetooth Special Interest Group predicts that over 90 percent of Bluetooth-enabled smartphones will support BLE by 2018.

What does this mean for retailers? A key focus of theirs has been developing strategies to bring in more foot traffic to physical stores and convert visitors into purchasers. More recently, these retailers also need find ways to simplify the payment process and offer consumers a more engaging and immersive shopping experience in order to boost their revenue.

MahindraComviva-BLE-Retail

BLE “stands poised to transform the shopping lifecycle” in more ways than one, says Mahindra Comviva. As indicated by the whitepaper, the BLE enabled retail experience involves the following:

1) Pretailing: BLE allows merchants to engage with consumers at the right time. In pretailing, it increases customer foot-fall through push marketing (proximity marketing), enables better business decision making through customer analytics, drives purchase decision with in-store offers, and provides out-of-the-box marketing and customer assistance.

2) Payments: In the contactless payments space, BLE’s applications are still under speculation, largely due to security. It’s potentially easier to spy on or interfere with data in longer-range BLE transmissions as opposed to shorter-range NFC transmissions. Infrastructure and checkout time also pose as potential concerns. However, BLE has been tested as a payment mechanism nonetheless, the most popular example being PayPal’s hands free payment system.

3) Post-purchase: After the transaction is made, a key focus is how to ensure that the consumer comes back for more. BLE drives repeated visits because beacons at the collection counter, payment aisle, or exit can be used to push messages that give customers reasons to return. In addition, beacons can evoke loyalty apps – provide updates about points added from customers’ purchases, suggest rewards or discounts that can be redeemed with points, and more.

BLE VS. NFC: COMPLEMENTARY, NOT COMPETING

Many view BLE and NFC as competing technologies, both “locked in battle for mobile consumer engagement.” However, rather than compete with one another, they complement one another, says Mahindra Comviva. Both play a key role in facilitating communication between consumers and businesses, and support for both can be found on modern smartphones.

The most basic difference between BLE and NFC is that they receive and react to signals differently, and differ in the range of signal coverage. And while BLE beacons transmit continuously, NFC-enabled smartphones use NFC Tags that only communicate when in close proximity to an NFC-enabled smartphone.

Other areas in which the two technologies differ include user experience, control over engagement and privacy, location identification, and security. Both BLE and NFC also have their pros and cons, for example, when it comes to security, NFC has been deemed more secure due to its proximity requirements. But BLE’s longer range allows for connections across greater distances and ranges of data transmission.

Today, NFC-enabled POS infrastructures are already in place in several stores. The technology for BLE is available and gaining momentum globally, but trials are still being conducted to determine the best way to integrate the technology into the consumer experience, according to the whitepaper.

Neither technology, however, directly infringes on each other’s capabilities, says Mahindra Comviva. The rise of BLE does not represent the end of the road for NFC. Much of BLE’s potential stems from this fact – the two do not compete, but rather work in tandem to provide a holistic consumer experience.