Following big press coverage of the technology at Mobile World Congress, Near Field Communication (NFC) technology is back on the radars of digital marketers in the United States as the technology spreads to more smartphones. What is NFC? The technology is currently in Visa’s payWave and MasterCard’s PayPass credit cards and makes it possible for objects to communicate with one another without making contact. Transactions can take place without the need to swipe a card. Users just have to tap the card to a sales terminal to make a payment, and this feature can easily be included in mobile phones as well.

The technology has been available in Asia for a while, with Japan and South Korea emerging as the lead users of the technology. In these countries the technology is already embedded in smartphones and featurephones, turning the mobile phone into a mobile wallet. Now the technology is spreading to U.S. smartphones and companies like Google and Apple see large potential for NFC to revamp mobile payments and mobile advertising in the years to come. For example, Google CEO Eric Schmidt boasted of the technology’s advertising potential at Mobile World Congress by discussing how it could be used at the point of sale to deliver customer data to the store in exchange for deals and promotions that would build brand awareness and store re-visits.

Google’s vision of the future is great, but what does NFC marketing actually look like in execution? A couple of years ago Japanese food & beverage company Meiji used NFC in a marketing campaign on train platforms. Users could touch their phones to the kiosk to receive a coupon for the new CoCo Presso beverage and then redeem the coupon instantly when using NFC to pay for the drink at a nearby vending machine.

Another example from Japan is the use of NFC to promote the film Wall-E using “smart posters” with NFC functionality built-in. When people tapped their phones to the poster, a video trailer for the movie played instantly on the device.

McDonald’s Japan also uses NFC in its “Kazasu” discount coupon service that has over 4.5 million subscribers. Participants can download coupons and create their order on their phones, and then they simply swipe their phone over the NFC reader at the point of sale to submit their order, discounts included.

In the United States the current infrastructure for such systems is lacking. Most mobile phone users do not have phones with NFC built in, but that is slowly changing. Analysts expect 70 million mobile handsets with NFC will ship in 2011 compared to only a few million in 2010, but there is no indication of how many of those will come to the United States. Google’s latest flagship smartphone, the Samsung Nexus S, can send and receive data via NFC, and many people are speculating that the next Apple iPhone will have the technology as well. With support from these two dominant players in the U.S. smartphone business, NFC is poised to at least make ripples in digital marketing in 2011 with the waves likely to hit U.S. shores in 2012 and beyond. Either way, marketers will need to prepare in advance for the technology by looking to the East for inspiration, of which there is plenty given Asia’s head start on NFC integration.

Simeon Spearman, 02.23.2011