Japan Leaps Ahead on NFC Technology for Shoppers as US Interest Grows

To say that U.S. businesses have been skeptical of near field communication (NFC) would be an understatement. Though the technology has been growing by leaps and bounds over the last few years, there are only about 3 million handheld devices enabled for NFC in the U.S. — enough that many shoppers now recognize the fuzzy black and white squares they see in public advertisements and store displays as something they can use their phone to swipe or otherwise interact with, but not enough that all that many do, or necessarily even know why they would.

Compare that with Japan, where 70 million phones and other handheld devices are NFC enabled. Why the huge disparity, and what do Japanese business owners know that Americans don’t?

Well, technically nothing. The whole world has had plenty of time to get a good look at NFC since the standard-setting NFC Forum was established in 2004, with the first NFC-enabled phone produced by Nokia in 2006. The technology is a spinoff of radio-frequency identification (RFID), better known as the tracking chips we were all going to be putting in our household pets at one point. Most of us never did, but NFC arose as a way to have two-way communication between devices — or a device and one of those black and white “tags” — at close range.

If you’re thinking that sounds an awful lot like Bluetooth or Wi-Fi, well, that’s what most American businesses thought, as well. Critics were quick to pile on about what they saw as the redundancy of the technology, and the potential for security breaches.

In Japan, however, NFC is seen as the next big leap in technology for a fast-paced society. Its potential for transmitting marketing information to consumers and allowing them to make in-store payments on their mobile phones quickly (without, for instance, having to wait for a Wi-Fi connection to be established) was seized upon immediately.

By spring of 2011, the BBC was reporting on how NFC devices had completely transformed travel in Japan. Maps and timetables are now accessible to travelers with the swipe of a phone, and even boarding passes are stored and transmitted via NFC. In another step toward the full integration of the digital experience with brick-and-mortar shopping, Japanese consumers are also using their NFC-enabled phones as e-wallets, loading up yen onto their phones to pay for everything from taxis to groceries with a touch of their phone.

Signs of increased interest in the US

This summer, Ad Age reported that two Gap stores in Tokyo had taken the technology’s consumer potential to the next level, offering bracelets to shoppers who can touch them to their phones when they find outfits they like, sending information about the items to their Facebook accounts. Revlon tested a similar idea in Tokyo, allowing customers to like items on Facebook by touching them with the bracelets.

U.S. businesses may be changing their minds about the technology, as well. DeviceFidelty is marketing an NFC mobile wallet for iPhone users, and PC World reported this summer that the use of non-phone applications for NFC are on the rise as well, with HP announcing an NFC chip in their latest ultrabook that will allow it to receive data from handheld devices and tablets, and Research in Motion launching a BlackBerry device called the Music Gateway that uses NFC to stream music to a stereo system.

Whether apps like these will be NFC’s big break in the U.S. is anyone’s guess, but as Japan has proved, the technology does have the potential to change the way we do business.

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