The expected return on investment (ROI) on near field communication (NFC) mobile payments is currently poor in Singapore, according to a report from Gartner on Near Field Communications (NFC).
Even though there is a very high smartphone penetration rate in Singapore, most mobile devices, including all iPhone devices and many Android smartphones, are not equipped with NFC features.
However, Singapore is identified as a good test market for fast-moving consumer goods (FMCG) manufacturers to experiment with new marketing and loyalty techniques using NFC-enabled devices.
Gartner says there is still time till mobile NFC payments becomes part of Singaporean daily lives as banks are still in observation or testing modes for this technology.
Only one NFC product was announced by a major bank: DBS as of November 2012. Also, Singapore is still planning to make sure that point of sales (POSs) at cash -centric grocery shops and food courts become NFC-enabled by 2015.
No clear sign of customer interest
Although there is no published figure of the number of customers adopting NFC in Singapore, Gartner expects it to be quite low.
Over the coming months, a few issues will continue impacting adoption and usage by customers such as their ability to handle quite a few steps to start using their mobile NFC solutions.
Customers will have to pay a premium to access and use NFC applications, visit a mobile shop in person to replace the SIM card, and download the mobile apps from Google Apps. Many customers may not want to do all this as they already have an option to choose other convenient payment methods.
Gartner says it is okay not to deploy NFC payment technology if immediate financial returns are the major driving force for the project.
Banks and financial firms reviewing mobile NFC payment opportunities and requirements should consider using short-term stopgap solutions, such as using quick response (QR) codes, instead of waiting for the NFC infrastructure to be ready.
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