Global Economics

Cashless in Caen


The tourist city of Caen in Normandy is hosting a major European trial of the use of NFC (near field communication) - a mobile technology that can be used for anything from paying for groceries to finding out about your home town.

NFC is already being used extensively across London, although you might not know it: the Oyster card carried by millions of commuters every day is based on the contactless technology.

By placing an NFC chip near a reader, up to a distance of a centimetre or two away, data can be transmitted to and from the chip. In the case of the Oyster card, permission to go through a barrier can be granted and a fee for travelling on the underground deducted.

But the Caen project has a more far-reaching use of NFC in mind, with residents now packing NFC-enabled mobiles to see if using the technology could catch on beyond public transport.

While NFC isn't new - Sony's FeliCa, a variant of NFC, is already big in Japan, where more than 100 million FeliCa chips have been shipped, some 10 million of which are carried on mobiles - the Caen trial is one of the largest, both in terms of number of users and applications.

In an experiment involving companies including Orange and Philips and the town's mayor's office, Caen's citizens have been road testing the technology since late last year at a number of locations.

Among them is an underground car park; the town hall; a bus stop which can transmit timetable information; a cinema poster which downloads video trailers to users' mobiles; a local supermarket, where people can pay for their groceries with a mobile phone, and a tourist information sign outside the historic Abbaye des Hommes.

By touching the mobile against the 'Flytag' logo at each of these locations, users can pay for services or receive information straight to their phone.

The Abbaye is one of the more interesting showcases for the use of this technology - by placing the back of the phone against an NFC reader in the sign, information about the site is sent to the mobile by either an SMS or a phone call, functioning like a cheaper version of the audio guides found at many popular tourist attractions.

Laurent Duchelet, furniture restorer and self-confessed non-techie, is one of Caen's citizens taking part in the trial, using NFC every day when accessing a car park and every week to pay for his groceries.

He told silicon.com: "There's a practical side [to NFC]. When I have my phone, I don't need to get out my cash, my card for the car park - and I can make phone calls. It's already normal for me."

He added the only problem he has experienced with the technology is the need to remember to keep the phone's battery charged.

Duchelet is one of 200 people taking part in the trial, which is in its first phase. The second stage will see the number of participants increased to 400 or 500 individuals.

According to Luan Le, design manager of NFC at Philips, the feedback from the trial so far has been "very positive" and Philips expects the technology to get its commercial legs in 2007 or 2008.

He said the most crucial element in the success or otherwise of NFC is the hardware - making sure phone makers are putting NFC models into the hands of users. "The five main manufacturers are in the process of trying out the technology," he added.

While Samsung may be one of the keenest - its D500 devices are being used in the trial - LG, Motorola, NEC, Nokia and Sony Ericsson are all members of the NFC Forum.

The issue of cost will also doubtless play a part in uptake, although the difference between NFC-enabled handsets and standard handsets was estimated to be $5 to $7, according to Deloitte and Touche in 2004.

The question of whether the user will pay to use the service is also yet to be decided. Currently, all the services on offer in Caen are free although they could theoretically be chargeable depending on the service.

More than likely, it will be payment providers such as Visa, merchants and mobile operators that bear the financial brunt of implementing the services. The benefits for them? More services for customers which could cut churn for mobile operators, shops could get customers through the tills faster and payment providers will be keen to shift more small payments away from cash.

There's also the potential for new services. For example, while people might be unwilling to splash out for a full museum audio guide, they might be willing to spend a few pence every time they fancy picking up a titbit of information.

Links:

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