October 3, 2014
A lot has been said over the last one year about how BLE will kill NFC and vice versa, and there are many people supporting the dominance of one of these technologies over the other for different reasons, especially in light of new developments in the payments space.
We believe there is a good case for these two technologies to co-exist merrily, and in fact complement each other.
From what we can see, it is clear that global commerce industry is moving towards a seamless mesh: one in which mobile, online and physical shopping will work together in concert, to offer a holistic consumer experience.
Location-aware commerce has become more powerful than ever before. Consumers today prefer using location based services/apps to discover and research the offering before zeroing in on something. Now with BLE, local retailers have tremendous power in their hands by utilizing multiple channels, even while it has enhanced the end consumer’s experience. But to execute such holistic experiences, different technologies other than BLE become relevant too: GPS, Wi-Fi Direct, Cell Power Triangulation and NFC, to name a few.
BLE is just one of the integral components of this location based commerce revolution, but it is certainly not the poster child of this revolution. It is yet to achieve widespread adoption. BLE works in a communication range similar to Bluetooth, albeit it consumes significantly less power.
BLE first came into focus a few years ago when Microsoft said that it was working on this technology to enable a considerably simpler payment system. The technology got a big boost by support from global brands like Apple and PayPal. There has also been a significant growth in the number of retailers who are adopting this technology in past year.
Different reports predict different numbers, but one can say with confidence that in the next 5 years, BLE unit shipments will be a big market
It sounds promising. But then, what about NFC? Is it not locked in a battle with BLE for customer engagement, and does it look like it’s losing this battle? The answer is No.
While most smartphones will be BLE compatible in the next five years, most of them will also be NFC enabled. BLE and NFC identify and react to different signals, and vary significantly in coverage range. Thus, both of them will co-exist, and will serve different purposes.
Beacons transmit continuously, while NFC uses tags that transmit only when it discovers an NFC enabled smartphone nearby. NFC has also been said to be more secure than BLE, largely due to its proximity requirements. They also differ in privacy features, location assessment and the degree of control on user engagement.
Currently, NFC enabled POS systems have already found adoption in many retail stores. BLE related initiatives are still ongoing to find the best way to integrate the related user experiences. However, both these technologies have their own sweet spots for optimal application, and they don’t quite get into each-other’s territories.
To an extent, the potential of both these technologies gets magnified due to the fact that the other technology co-exists to enable an integrated and uniform user experience.