By Will Hernandez
The anticipated proliferation of Near Field Communication technology has prompted a fledging company to create a device that features contactless functionality consumers would use to make payments, store loyalty cards, and communicate with NFC-enabled smartphones and posters, PaymentsSource has learned.
NFC Data Inc.’s Sqwizz device is a key fob that looks similar to popular small MP3 music players. The front of the device features a light-emitting diode screen and scroll buttons to navigate a menu. The back has a secure PIN pad consumers would use as a security measure to access and use the device’s multiple areas.
A contactless decoupled debit card would sit at the front of the device. Users would link the card to any checking account via the automated clearinghouse system using bank-routing and account information from a personal check.
NFC Data has an agreement with a Silicon Valley-area partner to distribute 100,000 Sqwizz devices in August, according to company co-founder and co-CEO Ken Mages.
Chicago-based NFC Data is positioning Sqwizz as more than just a payment device. Sqwizz also is intended to mimic functions an NFC-enabled smartphone might perform but less expensively–$29.95, or free, depending on distribution models.
Other Sqwizz functions include communicating with NFC tags found in smart posters, exchanging data with NFC-enabled smartphones, storing multiple loyalty cards, and receiving and redeeming coupons.
“There are a lot of compelling reasons why NFC [phones] can be complemented by a device that fits on your keychain and not cannibalized by the phone and vice versa,” Mages says.
NFC Data envisions several different scenarios for Sqwizz distributions models.
Telecommunication companies could sell the device in their stores as a precursor to NFC-enabled smartphones or as an accessory when those phones are available. Banks wishing to connect to their customers directly could give Sqwizz devices away as a promotional item, or electronic stores such as Best Buy Co. Inc. could sell the device as an “NFC thumb drive,” Mages says.
The company is seeking bank partnerships to cobrand Sqwizz’s contactless-payment function, Mages says. The company also is in talks with technology companies that produce keyless automobile-entry devices.
If NFC Data gets itself in a situation where the devices are given away for free, “we want to find the one strategic partner who shares the vision as clearly as we do and gets behind it and pushes,” Mages says. “It could be a bank, retailer or telco.”
Indeed, finding the right partnership will be key, says Todd Ablowitz, president of Centennial, Colo.-based Double Diamond Group LLC.
“Clearly, for anything to roll out you need a big entity to capture it, or you need a viral uptake,” he says. “When you’re talking about getting a hard product into people’s hands, it’s pretty rare that you’ll get a viral uptake.”
NFC Data plans to earn revenue from Sqwizz in various ways, Mages says. Banks, retailers or telcos would pay NFC Data to brand the device with their name and colors, and advertisers would pay a fee to NFC Data each time the Sqwizz captures information from an NFC tag, Mages says.
Mages is not interested in capturing revenue from decoupled debit cards. The company is more concerned with the NFC-initiated activities outside the payments environment the device would conduct, he says.
Sqwizz is designed to hang from a keychain, making it easier to access compared with a smartphone, Mages contends. The process of removing a phone from a pocket or purse, unlocking the phone, finding and opening the right mobile application, and paying fails to fall in line with the idea of speedy NFC transactions, he says.
At least one observer disagrees with Mages’ description of how NFC would work with mobile phones. “[NFC Data is] assuming NFC is going to be cumbersome,” Nick Holland, a senior analyst with Yankee Group, tell PaymentsSource, noting he has seen NFC phones work without having to open an application.
NFC Data has experienced some pushback on Sqwizz from potential partners, mainly because of its strategy to focus on a keychain device as the form factor. But Mages views the device as a way to consolidate loyalty cards and even to incorporate building access.
“When you first look at the Sqwizz, you might think it’s another piece of something you don’t need,” Mages says. “But I really feel strongly the mobile phone can’t be a Swiss army knife for everything.”
But the mobile phone is a network-connected device, which Holland believes illustrates an initial problem with Sqwizz.
“Where the real value-add [is with NFC] is getting access to real-time information [through the mobile network], not information at some point when you plug the device into your computer,” he says. “There’s no immediacy with the device.”
Sqwizz can connect to a smartphone through the audio jack, Mages says. Users capturing data on the device can see a preview on the screen and move the information to the phone for viewing. But if a user lacks a smartphone, information cannot be downloaded from the Sqwizz until connected to a computer.
NFC Data also is developing a mobile app that would enable NFC phones to perform the same functions as the Sqwizz.
Ablowitz believes it is difficult to determine Sqwizz’s viability because of the unknowns about NFC technology. “If [NFC] is like other things in payments like I’ve seen, it’ll settle out in a way that a bunch of people will sort of ask a question or two about security and quickly get comfortable,” Ablowitz says, noting a small but vocal percentage of consumer will have security concerns based on their interpretations of the product.
“If that plays up the same way with NFC, I’m not sure there is enough of a market for an alternative device,” he says. “I think those people are more likely to stick with what they have.”
Sqwizz could be “an idea that just might be a little ahead of its time because NFC hasn’t been proven out yet,” Ablowitz adds.
Mages previously was chairman, president and CEO of HomeATM ePayment Solutions. He left the company last March, (see story)
NFC Data Inc.’s Sqwizz device is a key fob that looks similar to popular small MP3 music players. The front of the device features a light-emitting diode screen and scroll buttons to navigate a menu. The back has a secure PIN pad consumers would use as a security measure to access and use the device’s multiple areas.
A contactless decoupled debit card would sit at the front of the device. Users would link the card to any checking account via the automated clearinghouse system using bank-routing and account information from a personal check.
NFC Data has an agreement with a Silicon Valley-area partner to distribute 100,000 Sqwizz devices in August, according to company co-founder and co-CEO Ken Mages.
Chicago-based NFC Data is positioning Sqwizz as more than just a payment device. Sqwizz also is intended to mimic functions an NFC-enabled smartphone might perform but less expensively–$29.95, or free, depending on distribution models.
Other Sqwizz functions include communicating with NFC tags found in smart posters, exchanging data with NFC-enabled smartphones, storing multiple loyalty cards, and receiving and redeeming coupons.
“There are a lot of compelling reasons why NFC [phones] can be complemented by a device that fits on your keychain and not cannibalized by the phone and vice versa,” Mages says.
NFC Data envisions several different scenarios for Sqwizz distributions models.
Telecommunication companies could sell the device in their stores as a precursor to NFC-enabled smartphones or as an accessory when those phones are available. Banks wishing to connect to their customers directly could give Sqwizz devices away as a promotional item, or electronic stores such as Best Buy Co. Inc. could sell the device as an “NFC thumb drive,” Mages says.
The company is seeking bank partnerships to cobrand Sqwizz’s contactless-payment function, Mages says. The company also is in talks with technology companies that produce keyless automobile-entry devices.
If NFC Data gets itself in a situation where the devices are given away for free, “we want to find the one strategic partner who shares the vision as clearly as we do and gets behind it and pushes,” Mages says. “It could be a bank, retailer or telco.”
Indeed, finding the right partnership will be key, says Todd Ablowitz, president of Centennial, Colo.-based Double Diamond Group LLC.
“Clearly, for anything to roll out you need a big entity to capture it, or you need a viral uptake,” he says. “When you’re talking about getting a hard product into people’s hands, it’s pretty rare that you’ll get a viral uptake.”
NFC Data plans to earn revenue from Sqwizz in various ways, Mages says. Banks, retailers or telcos would pay NFC Data to brand the device with their name and colors, and advertisers would pay a fee to NFC Data each time the Sqwizz captures information from an NFC tag, Mages says.
Mages is not interested in capturing revenue from decoupled debit cards. The company is more concerned with the NFC-initiated activities outside the payments environment the device would conduct, he says.
Sqwizz is designed to hang from a keychain, making it easier to access compared with a smartphone, Mages contends. The process of removing a phone from a pocket or purse, unlocking the phone, finding and opening the right mobile application, and paying fails to fall in line with the idea of speedy NFC transactions, he says.
At least one observer disagrees with Mages’ description of how NFC would work with mobile phones. “[NFC Data is] assuming NFC is going to be cumbersome,” Nick Holland, a senior analyst with Yankee Group, tell PaymentsSource, noting he has seen NFC phones work without having to open an application.
NFC Data has experienced some pushback on Sqwizz from potential partners, mainly because of its strategy to focus on a keychain device as the form factor. But Mages views the device as a way to consolidate loyalty cards and even to incorporate building access.
“When you first look at the Sqwizz, you might think it’s another piece of something you don’t need,” Mages says. “But I really feel strongly the mobile phone can’t be a Swiss army knife for everything.”
But the mobile phone is a network-connected device, which Holland believes illustrates an initial problem with Sqwizz.
“Where the real value-add [is with NFC] is getting access to real-time information [through the mobile network], not information at some point when you plug the device into your computer,” he says. “There’s no immediacy with the device.”
Sqwizz can connect to a smartphone through the audio jack, Mages says. Users capturing data on the device can see a preview on the screen and move the information to the phone for viewing. But if a user lacks a smartphone, information cannot be downloaded from the Sqwizz until connected to a computer.
NFC Data also is developing a mobile app that would enable NFC phones to perform the same functions as the Sqwizz.
Ablowitz believes it is difficult to determine Sqwizz’s viability because of the unknowns about NFC technology. “If [NFC] is like other things in payments like I’ve seen, it’ll settle out in a way that a bunch of people will sort of ask a question or two about security and quickly get comfortable,” Ablowitz says, noting a small but vocal percentage of consumer will have security concerns based on their interpretations of the product.
“If that plays up the same way with NFC, I’m not sure there is enough of a market for an alternative device,” he says. “I think those people are more likely to stick with what they have.”
Sqwizz could be “an idea that just might be a little ahead of its time because NFC hasn’t been proven out yet,” Ablowitz adds.
Mages previously was chairman, president and CEO of HomeATM ePayment Solutions. He left the company last March, (see story)
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