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24
Jul
2014

Shoes, Suarez and NFC Tags

POSTED BY Windsor Holden
The Holdens have quite active on eBay recently. From shoes to Star Trek replica ships, from speakers to die-cast military figures, we’ve been trying to flog ‘em all. We have also been offering our wares at assorted car boot sales in the vicinity, and by Jiminy, those car boot sales are assorted and no mistake. Now, this is not an advertisement for said products; rather, it is to serve as an exemplar for how much things are really worth. Let’s say you are attempting to sell a pair of designer shoes. You may have paid three hundred pounds for them; they are hardly worn. You may feel they are worth at least two hundred. However, the denizens of the Internet and of a car park in Bognor Regis may disagree, and decline to purchase them. At that point you have a choice. You can either hang on to the shoes, grumbling that the Internet/Bognor Regis have no taste when it comes to footware, or you can lower your price until somebody thrusts out a hand with a rather smaller wad of cash within it. Whether you like it or not, the value of those shoes is precisely what someone is prepared to pay for them at that time. To take another example: Luis Suarez, regardless of his penchant for dining off opposition players, is worth a cool £75 million because that is what Barcelona were prepared to pay for him in a free market, and so Liverpool could ask that sum of them. Seguing neatly from designer shoes and Suarez to NFC tags: at the end of last year, the Commonwealth Bank of Australia introduced a CommBank app for Android, which allowed consumers to use their handsets to pay via NFC even if the handset lacked a secure element. Provided, that is, they paid CBA A$2.95 for an NFC tag. At this point the designer shoe/Suarez question rears its head: are those tags worth A$2.95? Or are the CBA’s iPhone NFC cases (which also emerged last year) worth the $54.95 that is being asked for them? Admittedly, we are not talking about a single pair of shoes or a single Suarez here, but tags and cases en masse. So the question must be rephrased thus: what is the price at which tags and cases will sell in volume in a given market (Australia) at a given time (now)? And while I do not have a precise answer with regards to the cases, I certainly do when it comes to the tags. The price is zero. Nil. Zilch. In our recent report on Contactless Mobile Payments, we criticised the business model under which consumers were being charged for interim solutions. Bearing in mind that many consumers – particularly in Australia – already have a means to pay contactlessly (the overwhelming majority of credit and debit cards issued there now have contactless capabilities) why go through the rigmarole and expenditure of ordering a tag?  Surely, if you wish to build up demand for contactless payment via handsets (and many banks are very keen on integrating it into their apps, particularly since HCE came along) then why not absorb the cost and offer stickers free of charge? Or you can hang onto the tags, grumbling that Australians have no taste when it comes to payment mechanisms.