NFC – Great innovation is on the rise, but the market remains very fragmented. The diffusion of innovation using the example of Near Field Communication (NFC) multiapplication platform.

Abstract: The research is based in the Near Field Communication (NFC) market in Germany. Thetechnology is a standard for contactless information exchange via a NFC chip. Today mainlysuch chips are implemented into payment cards, member ship cards, public transport tickets etc.These are typical use cases and therefore the technology is used by the majority of people daily.The research underlies a problem, which is also the hypotheses, that people have too many ofsuch NFC cards. The innovation of the multi-application platform solves that problem. It is adigital platform, which can combine all cards on one device containing a NFC chip (e.g.smartcard, wearable or implant). Therefore, this study finds out whether this problem exists andhow to successfully implement that innovative multi-application platform into the Germanmarket and create a value proposition.Research question: How can a value proposition of a NFC multi-application platform becreated that the innovation gets accepted and diffuse to the German market?The research question is answered in a three-step process. Step one includes a market surveyabout NFC to find out the perception of the people towards the innovation as well as an analysisof the market through reports. Based on these combined findings a market strategy has beendeveloped in step two, which was then evaluated through expert interviews in step three.The analyses show that a multi-application platform is accepted by the people and would createa benefit to them. However, for the German market, the platform is only viable in combinationwith a smartcard as a NFC device, since this creates the least switch costs. Also, in order to beable to address a mainstream market and not only innovators or the early majority customerswithin a market, it is crucial to develop an individual market strategy. Based on the findings itis recommended to address a high potential NFC market and partner with service providers likepublic transport or loyalty providers. This creates a win-win situation for both parties and themulti-application platform combined with a smartcard would extremely benefit by diffusinginto a mainstream market fairly quickly.Even though the German market sees the benefits of the multi-application innovation, peopleonly accept it in combination with a smartcard. The card has the least switching costs, but alsothe least benefits compared to other mediums like wearables or implant. This shows that theobjective advantage of an innovation is not always the success for a product. It needs to bedeveloped based on the needs and wants of an individual market. Therefore, a smart NFCwearable or implant might be an innovation for the future, but the NFC smartcard is the viableproduct to enter the market.