Today we’re excited to release a brand new blog series that will take an in-depth look at why NFC will never replace the barcode on product packaging. NFC has been the talk of the mobile payment world for the past two years now, ever since companies like Google and Isis—the joint venture between AT&T, T-Mobile and Verizon—created NFC-based mobile wallets. In this context, many people also promote the use of NFC for mobile interaction with consumer products and as a replacement for barcodes on product packaging.
We’re sorry to have to burst their bubble, but we wanted to enlighten those riding the NFC bandwagon by sharing 5 reasons why NFC will never replace the barcode:
1. NFC tags are too expensive
One good reason NFC will never replace the barcode is that NFC tags are just too expensive. Consumer goods manufacturers would need to put NFC tags in all their product packaging. We’ll be taking an in-depth look at the numbers in a post early next week and illustrate why placing an NFC tag on every product is not feasible from a cost perspective!
2. Millions of products would need re-design
Placing an NFC tag on consumer packages in such a way that it can be read by an NFC-enabled smartphone is no trivial task. Because metal surfaces, liquids and other dielectric materials impede the easy identification of NFC tags, many products will require custom tagging solutions. We argue that developing custom product packaging solutions for millions of products is a time-consuming and expensive process and nothing like that will happen overnight.
3. Lack of NFC-capable devices
To motivate consumer goods manufacturers to place NFC tags on their products, most smartphones would have to come with NFC support. But mobile operators will only start paying extra for smartphones with built-in NFC readers once consumers request NFC support. We’ll argue that even with a projected 200 million NFC capable devices hitting the market by the end of 2012 that there is still a lack of NFC-capable devices is standing in the way of having NFC replace the barcode on product packaging. This will inevitably slow down the adoption of NFC, even when used only for mobile payment for quite some time.
4. NFC doesn’t have any B2B benefits
Another factor that affects the future of NFC is that NFC tags on product packaging have no or little benefit from a B2B perspective. The short read range of an NFC tag makes it useless from a supply chain perspective – supply chain applications would require the identification range of proper RFID systems with several meters range. In this post we’ll argue that the B2B services will not be a driver of NFC adoption.
5. NFC will have to be accepted by users
Lastly, we’d like to make the point that shopping using NFC isn’t necessarily more convenient than shopping with barcode-based systems. Why switch to a system that doesn’t improve our lives? We’ve decided that the best way to investigate this is to hold a race and share it with the world. We’ll be producing a video that captures the ultimate point-of-sale showdown between barcode and NFC! Be sure to stay tuned for this exciting post.
While the above reasons will prevent NFC from replacing the good old barcode on product packaging, NFC may still be used as a complement to barcode, specifically in the much-hyped mobile payments space. Here, barcodes will continue to play their key role as product identification technology before and at the point of sale (POS), while NFC-based payment technology may eventually become more widespread—as NFC-based phones become more prevalent, as merchants start getting real value from NFC-based POS systems and if ISIS or a similar standard will be embraced as such. To sum it all up: While NFC may prove to be a feasible mobile payment solution, barcodes will remain crucial for labeling consumer products for many years to come. Be sure to stay tuned for an in-depth look at why this is!
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