Amazon May Soon Explore NFC Service for Mobile Payments, Retail Therapy

Amazon Exploring NFC for RetailIn a move that will set them up to compete with current mobile giants like Google and Apple, Amazon appears to be seeking entry into what will likely become the most lucrative expansion to handsets over the next year. Details are sketchy right now, but Bloomberg ran a story last week speaking about a not-yet-public project inside of Amazon that would harness the power of Near Field Communications for customers.

Unlike other movers-and-shakers in the market, Amazon actually represents a retailer and mover of consumer products that the financial side of mobile payments would involve. While Google, Microsoft, Apple, and others have been focusing on the virtual wallet aspect of mobile payments using NFC, Amazon will probably be looking at involving the marketing side of NFC by engaging the customer as much as their money:

Amazon is also considering creating NFC-based marketing services, one of the people familiar with Amazon’s project said. For instance, a consumer shopping for jeans who can’t find the right size in a retail store might be able to tap a handset against the item’s NFC tag to locate the correct item for order through

Amazon already offers an application for Apple’s iPhone, called Price Check by Amazon, that lets consumers compare prices of in-store items with Amazon’s by scanning bar codes, snapping pictures, or saying or typing the product’s name.

The online retailer will decide whether and when to unveil the NFC mobile-payment services in the next three to five months, one of the people said.

While the real power behind NFC happens to be the capability of two devices to quickly exchange a small amount of information; it’s also possible for NFC clips to be embedded in tags a lot like RFID tags (i.e. there are versions from 2010 that require no battery and draw power from the proximity of the mobile reader or smartphone.) Meaning, that the first paragraph above could be a likely scenario: a consumer could use a smartphone to interrogate the NFC tag on a pair of jeans.

This factor opens up a wide variety of questions for retailers as it does for Amazon. It’s not exactly in the best interest of many retailers to allow their customers to leave the store simply because they cannot find the proper fit on the shelf—but it might be extremely useful if the NFC tag inside a pair of jeans collaborated with customer service in allowing the user to order from the in-store catalog, communicate with the infamous “in the back of the store,” or summon a customer service representative. As long as NFC connects customers with brands to give them coupons, deliver marketing, and open up further avenues for shopping, it might as well connect them better with the establishment they’re already in.

Already NFC is extremely hot stuff. Google brought it to market first with the Nexus S and now have jumped on board with the Near Field Communications Forum; Microsoft is already planning to enable NFC technology in soon-to-be-released Windows Phone 7 models; even Apple has been focusing on their game by paving the way for iPhone and other iOS devices to embed NFC-reader chips. While Amazon doesn’t make handsets themselves, they will be able to take advantage of all the devices soon-shipping with NFC technology and as long as they play their cards right—in both strategic partnerships with retailers and with transaction software—they’ll be able to carve out a notable piece of the NFC pie.

In fact, outfits like Google and Amazon would find huge benefit if they decided to partner with retail establishments by tailoring not just NFC but hyperlocal marketing to permit retail stores to transmit and/or allow access to their daily deals via smartphones. The concepts of sales themselves do more than just draw people in from TV advertisements, newspaper ads, and so forth, they also drive in-store shoppers to spend more money than they otherwise would have. Knowing about sales while in-store could draw customers from different departments to find deals they would have otherwise missed.

Amazon has positioned themselves extremely well for these sort of partnerships, especially because in many cases they have literally become a working limb for the Internet catalog for many big-box retailers.