How Will the Pandemic Propel the Adoption of NFC in a Post-COVID World?
Last Updated: September 24, 2020
As the world continues to sail through uncertainty in the newly adopted world, businesses are faced with many challenges – shifting business hours, fluctuating supply chains, and protecting their employees – all while ensuring that the public health is a priority whilst taking these decisions.
The impact of the pandemic is felt by everyone. As the world adapts, consumer behavior is changing rapidly.
Businesses will be anything but usual post the lockdown all across the globe. Even with stringent rules in place, contactless solutions such as NFC and QR Codes can especially help decrease infection rates.
According to a recent report by Google, users have a continued interest in staying up-to-date with the latest regulations set by their governments. People are also being optimistic about life returning back to normal with increased searches for essential and non-essential services.
As several nations across the world are slowly lifting lockdown regulations, businesses are starting to open up. These businesses cannot function like they did pre-pandemic.
Contactless solutions will be the new future in a post-pandemic world. Contactless technologies such as NFC tags and QR Codes are on the rise and will continue to be in existence since it promotes zero-touch.
With new regulations and social distancing rules in place, contactless technologies like NFC will become the new norm. Consumer-centric industry verticals such as retail stores, F&B, and FinTech will see the most usage of NFC in the near future.
The post-pandemic world will witness a rise in NFC. Why?
As governments and industry verticals are scrambling to take post-pandemic effective measurements to minimize losses and increase efficiency to flatten the curve, NFC-based solutions are rapidly becoming the new norm.
Popular names in the industry such as Walmart, DoorDash, and Amazon have turned to NFC and QR Codes to explain hygiene practices carried out in detail, maintain social distancing, and use technology to curb the infection.
NFC technology promotes a zero-touch action avoiding users and business owners to come in direct contact with one another.
What circumstances have induced the peak of NFC during and after COVID-19?
With social distancing and zero-touch transactions becoming the new standards, various industry verticals are switching to contactless solutions surrounding NFC and QR Codes.
COVID-19 has particularly seen a spike in usage of contactless solutions in –
Contact tracing apps that make use of NFC and/or QR Codes to declare the health status of their customers and staff
Cashless transactions using e-wallets and credit/debit cards
Contactless grocery store shopping and BOPIS (Buy Online and Pick It at Store)
Heat-sensitive temperature devices
As scientists and health experts are swiftly working towards a vaccine, technologists, and marketers are gathering data to switch to contactless solutions for smooth and safe operations.
This means that NFC will particularly be used in most use-cases given its simplicity of usage and how it can be used as a channel to communicate with each other without coming in close contact.
What will be the new use-cases post-COVID supporting NFC?
As businesses of all verticals are slowly opening their doors, owners are scrambling to reduce the risk and reassure them with an array of contactless operations.
Here are some of the key industry verticals to witness a new set of use-cases supporting NFC –
According to a report by Financial Technology (FT) Partners, 2019 was the most active year for Fintech financing, M&A, and IPOs. With the currently forced hiatus, a new landscape will emerge when the dust settles.
The fintech marketplace has definitely felt the tremors in conjunction with traditional banking institutions. This is best witnessed by the slowdowns in funding, drop in new fintech firms, and reduced revenues.
Mobile solutions are proving to be saviors in emerging markets. With NFC being the primary focus, here are a few ways the FinTech industry can adapt the technology to be more useful –
1. Robo-Advisory will be on the rise
Robo-advisory is reforming the landscape of wealth advisory services. The practical need for no-touch and low touch investment solutions can deliver more informed analytics to the user and this trend will be higher than ever.
The growth of robo-advisory is attributed to the fact that it enables low-cost services, scalability, and next-generation user experience.
FinTech enterprises can incorporate NFC tags on their slot machines, allow the customer to tap the NFC using their smartphone, and present them with viable financial advice based on their history.
There are already significant activities being implemented by several companies which also include the integration of artificial intelligence (AI).
2. Fraud protection to minimize scams
With revolutionary changes occurring in the world, fraudsters are looking at new loopholes. Some of the most common COVID-19 scams include impersonating as government funds or public health organizations demanding payments.
In response to this, large financial institutions and merchants can make use of NFC to improve fraud detection and prevention.
NFC can be used to confirm the authenticity of the payment demands and also investigate its effectiveness.
#2 NFC mobile payments
The global payment gateway market is witnessing a great demand for cloud-based solutions, especially from SMBs.
Retail and consumer payments are leading the way in the adoption of contactless payment solutions using NFC and QR Codes. The post-pandemic world will witness a spike in contactless usage in most industry verticals, but especially for payments.
For instance, Germany has witnessed contactless payments go from 35% to 50%. Mastercard has confirmed the shift, and McKinsey & Company has identified a sharp decline in cash transactions, to just below 80% from almost 90%.
Here are some of the key trends in digital payments surrounding NFC post-COVID –
1. Adoption of payment hubs
Several banks are interested in shifting their investments in harmonizing their payment infrastructure by moving to payment hubs. These hubs are capable of handling any form of payment irrespective of their origin.
With NFC, this process becomes easy. Consumers with an NFC-enabled smartphone can process the payment and the payment hub can receive it via NFC tags to convert it into the required mode of payment for a successful transaction.
2. Real-time payment
Real-time payments have especially revolutionized the retail industry by processing money electronically within a span of a few minutes.
More than 50 countries worldwide have announced raising contactless limits on the cards, in most cases doubling the minimum allowance to drive greater consumer convenience.
The most common methods of contactless payments include tapping an NFC enabled card or a smartphone on a point of sale (PoS) terminal to carry out the transaction.
3. A shift towards cashless societies
Sweden, Norway, and Denmark are on the path to becoming cashless societies and are adopting no-cash models. In addition, physical cash may contain the virus since it can transmit via surfaces as well.
For such reasons, the pandemic is driving the adoption of contactless payments and pushes several markets towards a new cashless paradigm.
4. An omnichannel offering for better customer experience
The framework of contactless payments offers a seamless customer experience across various channels leading to a better transaction experience.
The hospitality industry has been hit the hardest in the wake of COVID-19. Yet, most big names in the restaurant industry quickly adapted to new changes in order to serve their consumers efficiently and keep them safe at the same time.
1. Adoption of digital menus
Restaurant chains all across the globe are quickly shifting towards contactless menus or digital menus that can be accessed via the user’s NFC-enabled smartphones. With a simple tap, the user is presented with an array of food that can also be ordered via the same gateway.
This use-case does not require the user to touch any surface or come in contact with any restaurant executive making it entirely contactless.
There has been a substantial surge in contactless delivery and pick-up all across the retail sector. The fear of being exposed to the virus has given rise to contactless grocery and food delivery and pick-up.
Amazon, DoorDash, and McDonald’s offer these services. Not just that, several quintessential services have now completely shifted to just grocery and necessary items delivery due to the situation they are presented with.
The consumer orders online using an application, the payment can be made either online or at the POS using an NFC-enabled wallet.
NFC can be greatly leveraged to check the constant flow of inventory and change the restaurant’s delivery model as per requirements. The business owner and user can simply tap the NFC on the food package to check if the contents are fresh, their source of origin, and also check for inventory.
The pandemic has no doubt given birth to several use-cases revolving around contactless solutions. But none of those can correctly function without the proper checking of their employees and customers’ health status for smooth operations.
Platforms all across the globe are introducing contactless tracing solutions using QR Codes and NFC.
One such platform is the German-based MYNXG introduced blockchain technology to enable privacy-complaint pandemic tracking via smartphones. Users can download the app on their smartphones, use their existing NFC to connect the blockchain.
The app alerts people when someone in their recent contact chain has been affected by the virus and guides them to the nearest test center.
In addition, NFC can be used –
At schools and educational institutions for students and staff to declare their health status
At hospitals and clinics to learn about their patients’ symptoms and gauge if they are infected
At workspaces to track their staffs’ activity and health status
At public transportation hubs to track people and alert them of any possible infection
Packaging has seen a tectonic shift in the last couple of years. From being used purely as a medium of protection against the surroundings to encompassing a digital medium for consumers to engage efficiently, the CPG sector has definitely witnessed a massive growth.
Now, in these times, CPG can be of great use for both the customers, supply chain management, and business owners.
1. Use NFC to deliver useful information to customers
NFC is easily accessible via an NFC-enabled smartphone with a simple tap. With the pandemic, customers are now sticking to home-cooked meals since they are healthier.
According to Google, about 30% of consumers in India and Australia ventured out of their comfort zones and purchased something they normally would not buy. Consumers are now on the lookout to try out new recipes packed with nutrients or replicate their favorite dish from the favorite restaurant.
This presents a massive opportunity for food manufacturers to leverage NFC technology and embed it on the package. Integrate an NFC tag on the packaging and encourage customers to tap it.
Once they tap, redirect them to a separate page with dishes that could be prepared using that particular product, reveal its origin, and also its nutritional values.
2. Demand for transparency on product sourcing
People in the current times are looking for practical and relevant information from trusted sources. Consumers are highly aware of the importance of strict hygiene and food safety.
Technologies such as NFC and blockchain in supply chain processes can be helpful in allowing better visibility and transparency on product sourcing and manufacturing.
62% of Chinese consumers said that they are now more rational in their purchasing decisions, preferring to take a long-term view and putting more thought into their purchase list.
NFC-based intelligent labels and packages are on the rise instructing their users on how to use a product, the correct sterilization method used, and also, to authenticate their products.
NXP explains, “The safety and security are necessary to help tackle the spread of COVID while giving scientists, medical staff, and patients the ability to interact with products so they can verify the authenticity, check expiration dates, and even gain useful insights into the nature of the virus.”
The health sector is going to be the most crowded place in the coming future. Keeping that in mind, NFC can help in the following ways –
1. NFC-enabled product authenticity
NFC tags on product and equipment packaging can help inspectors, consumers, and medical staff to securely verify the product’s authenticity and check if it meets the regulatory standards via a smartphone.
2. Secure access to test results
Patients and medical staff can simply tap the patients’ records to open secure links to gain direct access to their test results.
3. Self-testing assistance
Several medical labs are testing out self-testing kits to check for COVID-19 by patients themselves. Digitized, step-by-step instructions can be delivered to patients to ensure they are using it correctly via NFC tags embedded in the package.
4. Remote ordering
With NFC, patients can be directed to the buying page of the manufacturer and include interactive features to send them a refill reminder to enable them to renew their prescriptions and re-order supplies.
5. Detect tampering
Place a tamper loop in the tag or inside a closure can to irreversibly store an opening detection and communicate. In case the medicine has been tampered with, the user can tap the NFC to clarify and check if the product has been diluted, refilled, or otherwise substituted from the original.
Future of NFC in a post-COVID world
Like we established, businesses will be anything but usual in the post-COVID world.
An Astound Insight’s COVID-19 consumer survey revealed that consumers have modified everyday activities to be as contactless as possible. In addition, more than 8 out of 10 customers across Vietnam, China, and Australia said it is completely okay for companies and brands to be communicating at this time.
NFC promotes transparency, safety, and awareness to end-users, middle men, and manufacturers in the post-COVID world.
Contactless or zero-touch will become the new norm in the coming future. With companies and brands promoting transparency and adhering to strict hygiene standards, they can still serve their consumers effectively.
Some of the key future use-cases will be – efficient monitoring of people via their health and contact tracking, AI-enabled drug development, increased reliance on robots, rise in esports, and strengthened digital infrastructure.
There will also be an increased expansion of voice and machine vision interfaces that recognize faces and gestures throughout several industries to limit physical contact.
If you have more suggestions and insights into NFC-based use-cases, please mail me at email@example.com
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This blog was originally published on May 20th, 2020 at 06:49 pm