Changing the way we pay for travel: What’s happening with NFC – Near Field Communications?

When I first started my career in business travel, I can remember flying the no-longer-in-business Eastern Airlines Shuttle to/from La Guardia/NYC to Boston and Washington. What was really cool, you didn’t even need a reservation and you could actually pay on board the plane. Well that might seem cutting edge for the late-70s “sans technology” as the flight attendants actually had to carry clunky credit card validation machines and
then gave you a paper ticket. It’s hard to even imagine the labor intensive
back-end processing which took place as a result. Looking back, it was fairly
efficient for those times.

Let’s ramp up the history lesson here and consider the emerging technology, NFC and not the National Football Conference but, Near-Field Communication . The payment options will develop and as my fellow blogger previously reported will likely eliminate the need to carry a credit card.

There’s a trend among suppliers (airlines, car rental companies, and hotels among others) to improve direct purchasing, the end-user experience and direct channel commerce
for both leisure and business travelers. We have seen airlines (Delta) and
cruise lines (Carnival) increase their marketing and bookings via f-Commerce,
Facebook for example, supplementing web-sites and other traditional
channels.  These new points of purchase point to and validate the direct effort, versus using intermediaries; such as OLBT’s/online booking tools, GDSs and TMC/Travel Management Companies  QC and back-office processing, but it will take time to evolve.  Briefly and in other words, really messing up the past ten years of automated business travel bookings development.

Moving forward a bit, a current example found using NFC includes Starwood Hotels, for their new brand, Aloft Hotel.  Aloft is pilot-testing a service that enables guests to avoid the check-in line and head directly to their room. The service is being tested at the Aloft in Lexington, Massachusetts. It’s a start, and surely others will follow and in other travel service sectors, like the airlines and car rentals.

Now this might not be an immediate threat or even disrupt the current booking technology flow, at least yet, but consider the possibilities. For example, imagine checking in for a flight, you have your Smartphone with an NFC activated app, the airline recognizes you and within seconds you are getting messages about options for a discounted one day visit to the airline’s private club, a uniquely priced upgrade, a hearty meal to delivered to your seat (remember meals on airplanes?) or if flying in coach on an overseas flight -how
about a very nice amenities package with blanket, blinders, pair of flight socks, and tooth brush for arrival in the morning. And, of course, you just swipe your smartphone, not your credit card and like magic, your credit account is charged and the service is delivered.

All of these examples are all targeted at improving the user experience and provides options while not bundling the particular service at the point of purchase, or whenever you made your reservation and bought your ticket. Another example, paying baggage fees with your Smartphone via NFC instead of reaching for your wallet curbside while checking in at PHX on a hot summer day or in the winter, in the Minneapolis.

Getting back to my way-back when in the 70’s example, let’s take a look at current
example. ANA, All Nippon Airways.  Japan’s leading airline, ANA, has been using
NFC technologies with smartphones to compete with the country’s “bullet” trains
for more than five years.  The major difference in Japan between domestic, fast train services from city center, to city center is the time lost to/from and at the airport. ANA has combined the ticket and boarding pass in your phone, so you can arrive and board your plane within fifteen minutes, versus 60-90 a real timesaver.

So how does this change the way we think about buying airline tickets and traveler services? In the future, users could conceivably buy their air ticket using their phone at a convenience store, like a “7-11” with such readers. Or, how about when you check-out of the Aloft hotel and on to your next city and appointment?

For more on NFC here’s a link to Oracle’s site and definition with cool
graphs too.          

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