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April 05, 2006 12:00 PM US Eastern Timezone
How Would You Like to Pay for That? Cash, Card or Phone? Philips and Visa Usability Study Shows Consumers Like the Convenience of Contactless Payment Using Near Field Communication
CTIA Wireless 2006
LAS VEGAS--(BUSINESS WIRE)--April 5, 2006--Royal Philips Electronics (NYSE:PHG)(AEX:PHI) and Visa International released the results of a new usability study of Near Field Communication (NFC) and contactless payment technology, which showed that consumers like the convenience, ease of use and "coolness" of making transactions with their mobile phones.


NFC facilitates secure, short-range communication between electronic devices, such as mobile phones, PDAs, computers and payments terminals via a fast and easy wireless connection. Combined with contactless payment technology, NFC can enable secure and convenient purchases with a mobile device. Using an NFC-enabled mobile phone, participants in the usability study conducted transactions in several different scenarios -- making a purchase at a coffee shop, downloading a movie trailer in a DVD store, shopping from a TV at home, and buying concert tickets from a smart poster.

Test results and implications

Participants in the usability study accepted and appreciated the concept of incorporating information transfer and secure payment functionality into mobile phones. Retail purchases with a mobile phone were particularly well received, as participants found Philips NFC technology and Visa contactless payments easy to understand, convenient and fast.

Study highlights include:

-- Coolness factor of mobile transactions. Users enjoyed downloading content from NFC "smart" posters and responded favorably to the idea of purchasing tickets through posters. They described the technology as "cool" and "awesome" and liked the idea of then being able to use the phone to gain entry into an event.

-- Mobile payment is easy to use. Consumers found it easy to make contactless payment using the mobile phone. Learning curves were very short, with all participants interacting confidently with the mobile phone and payment terminals. Consumers found it intuitive to initiate a transaction by holding up the phone to the terminal, as an alternative to presenting a payment card.

-- Mobile payment is convenient and fast. The test participants enjoyed the ease of use, convenience, speed of contactless payments on an NFC-enabled phone. They also liked the idea of not always having to carry a wallet or purse.

-- "Receiving" transactions should be automatic. When using the phone to make a purchase or download information, the transaction should be automatic; participants liked the simplicity of transactions that were initiated just by holding the mobile phone to an NFC-enabled reader. However, for "sending" applications, such as selling a ticket to a friend, users may prefer to initiate the transaction with a command.

-- Need for clear, consistent mark. Test participants generally looked to find a mark to indicate exactly where an NFC transaction could take place. The most intuitive place for a mark was directly over the communication point. Users did not want to guess where and how to orient their mobile phones to complete a transaction.

"The usability study clearly demonstrates that consumers like the simplicity of using NFC to access and securely pay for entertainment, information and services while on the move," said Christophe Duverne, vice president and general manager, Identification, Philips Semiconductors and Chairman, NFC Forum. "Now it's up to us -- the industry -- to cooperate effectively and deliver on the promise of the technology by driving standardization and building the ecosystems that will ensure commercial success. And of course, we must keep the end-user experience first at all times."

"Visa was very pleased with the results of the study, which demonstrated not only that the participants reacted positively to contactless payments with mobile devices, but also that there is real excitement among consumers," said Gaylon Howe, executive vice president, Consumer Product Platforms, Visa International. "The study provides a strong validation for Visa as we continue to drive acceptance for contactless technology, which will be critical for widespread uptake of mobile payments."

Philips and Visa conducted the study in December 2005 in Atlanta, Georgia. The research is part of the companies' efforts to develop programs that bring convenience, ease of use and security to mobile transactions. The purpose of the research was to take an in-depth look at usability and learn about consumer behavior when interacting with the technology.

Editors' Notes

There are currently several major trials underway around the world, with more expected throughout the year, to understand the benefits NFC technology can bring to people's everyday lives.