It would be good to start with few questions which could help us what is it all about & will Apple iBeacons disrupt mobile payments, mobile loyalty.
What is Apple’s new iBeacons ?
Is iBeacon just a solution for in-store marketing ?
Will iBeacon required merchants to add a new Bluetooth broadcast device in their store ? is it more of a indoor mapping, micro-location based context aware sensor ? Will merchants buy, update their software, integrate with iBeacon ?
Will it be a offers spamming or breaking the privacy technology while shopping ?
Apple’s iBeacon works on Low Energy Bluetooth (BLE), it is also called as Bluetooth 4.0 & Bluetooth Smart. In real life scenario it would be more of a location-aware, context-aware, pervasive small wireless sensor beacon which will know where you are, what are you doing, how long have you spent time at which location, which merchant, in which isle of merchant store, users would be pushed personalised in-store offers & you never know you might get a custom personalized welcome message next time you go shopping as merchant might know your name. It could enable payments at the point of Sale (POS) such that you don’t need to remove your wallet or card to make a payment. It could be possible Near Field Communication (NFC) competitor. It would be interesting to see how merchants/retailers react to this new technology upgrade & technology investment that will go behind iBeacon.
Considering the current landscape MCX is planning to move ahead with QR/Barcode based mobile payments, they already upgraded to NFC enabled POS whose usage has not picked up yet in the market. Introduction of iBeacon is a new set of software & new hardware addition & integration. This is going to lead to lot of confusion among the customers as well as retailers to know which payment technology to use. Consumers will be confused which customer has iBeacon, NFC, Paypal, Google Wallet, QR Code, Barcode. Rather we might see consumers stick to their credit card to avoid confusion on all these technologies. Also, this might increase time to process a transaction at point-of-sale.
Since BLE is a low energy technology it may face lot of chanllenges, such as data transmission rate, streaming might not be possible, security still remains a unclear subject, how would it manage broadcasting offers information on mass scale when in-store traffic is at its peak.
Few Companies providing solutions:
It would be interesting to see how iPhone is going to sustain with device battery life. There is some basic differences between iBeacon Bluetooth technology vs NFC.
iBeacon range is 50 meters vs NFC is 20 cm (NFC was always designed to be used as a payment solution & not as indoor navigation) iBeacon is Bluetooth technology which is inbuilt in pretty much 100% of smartphone devices vs NFC is a additional chip to be added on mobile device. which yet many phones don’t have it. Basically, iBeacon is ZERO cost from consumer perspective & adoption could be higher if implemented correctly vs NFC would be gradual based on consumers buying new technology. iBeacon is yet not clear on HOW could it enable payments on POS vs NFC is designed to enable mobile payments at POS.Overall, iBeacon is new looks promising, few pilots of practical implementation and data around it would be helpful to conclude how, why, when, where, what price, would be viable to implement this technology & how consumers adoption rate is. Will it support mobile payments the answer to that question is still unknown & there is lot of speculations around it. At times comparing NFC with iBeacon I feel is a not a apple to apple comparison. Many questions & challenges will surface since Paypal looking to release some iBeacon supported products in 2014.
About Author
Aalok Jariwala – Product Manager Consultant, Mobile Payments/Offers/Banking
Aalok brings with him entrepreneurial aspiration & acumen with his extensive experience in area of Mobile Banking, Payments & Offers (branchless banking in emerging countries). Currently, Aalok holds product manager position at U.S.Bank. Prior to U.S. Bank, Aalok worked as Director of Product & Sols at SourceTrace Systems for branchless mobile banking/payments solutions heading south east Asia products. He has pursued various shorter stints in startups for online architecture 3D room planner, online shopping assistance service, medical tourism, & other manufacturing industries. Aalok hold’s Master of Science degree in Computer Science from San Jose State University, a post-graduate degree in Computer Engineering, a diploma in Business Management and a diploma in Mechanical Engineering.