Technology StocksRFID, NFC and QR code Technologies

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From: Savant1/31/2012 11:43:42 AM
   of 1691
RT-UPDATE: MasterCard Urging Merchants, Banks To Upgrade Card Technology

Last Update: 1/30/2012 5:41:02 PM

--MasterCard shifting liability for some card fraud to merchants in 2015

--Move follows similar plans by Visa

--Chip-based cards considered more secure than magnetic-stripe cards

(Updated with details about mobile payments in paragraph 12 and comment from
industry executive in paragraphs 15 and 16.)

By Andrew R. Johnson

NEW YORK (Dow Jones)--MasterCard Inc. (MA) is pushing merchants to upgrade their
checkout systems to handle high-tech credit and debit cards that store
information inside a computer chip rather than a magnetic stripe.

Such technology is common in foreign countries, where banks for years have issued
chip-enabled cards to their customers to cut down on fraud and meet regional
standards or country regulations. It has yet to catch on in the U.S. market.

The technology, which adheres to card industry standards known as EMV, is
considered to be more secure than magnetic-stripe cards because customer data is
encrypted inside a chip, making it harder to hack into. While a handful of U.S.
banks and credit unions have begun issuing the cards here in the last two years,
mostly to customers who travel abroad, retailers have held off on upgrading their
payment terminals because of costs.

"The U.S. has become an island in waters that are surrounded by EMV," Chris
McWilton, president of U.S. markets for MasterCard, said in an interview Monday.
"We're the only major market in the world that hasn't adopted the EMV standard."

MasterCard competitor Visa Inc. (V) last year announced a similar plan intended
to spur adoption of the technology, which some analysts said would be slow to
gain traction without agreement from competing card-processing networks.

"It's only effective if the other networks do the same," said Julie Conroy
McNelley, a senior analyst with market research firm Aite Group LLC.

Merchants don't want to spend money on technology if the benefits and
requirements differ among card companies, McNelley said.

MasterCard plans to shift liability starting in October 2015 to merchants who
have not upgraded their checkout equipment to process transactions made with
chip-based cards if a customer pays with such a card and fraud occurs, McWilton
said. Banks currently pay for most card-fraud costs.

The company will also allow merchants to reduce some security-audit activities if
they upgrade to certain EMV terminals. That relief would phase in beginning
October 2013. However, they must still be in compliance with the security

MasterCard is urging banks that issue its cards to adopt the standard, and will
hold them liable for some forms of card fraud if they have not issued chip-based
cards to their customers, depending on whether a merchant has EMV terminals,
McWilton said.

"Our thinking here is what we've got to do is ... get the infrastructure and the
ecosystem for payments in the United States to eventually enable a better
customer experience," McWilton said.

A move to EMV equipment by merchants could also advance mobile-payment
technology, experts said. The terminals that handle chip-based cards are often
compatible with systems that allow customers to tap and pay with a smartphone
embedded with payment technology. Such systems are just now being rolled out or
tested in the United States.

A handful of banks, including J.P. Morgan Chase & Co. (JPM), Wells Fargo & Co.
(WFC) and U.S. Bancorp (USB), as well as some credit unions have begun offering
EMV cards to customers who travel abroad frequently.

Their motivation is to cut down on complaints from customers who frequently run
into problems trying to use their magnetic-stripe cards overseas. Many overseas
merchants insist on accepting chip-enabled cards, and some machines, like ticket
kiosks, can't handle magnetic-stripe cards.

A wider scale deployment by U.S. banks isn't likely until merchants begin to
upgrade, said Randy Vanderhoof, executive director of the Smart Card Alliance, an
organization that promotes the technology.

"At that point it will make economic sense for the issuing banks in the U.S. to
start converting their mag-stripe portfolios over to" chip-based cards,
Vanderhoof said.

MasterCard's move follows initiatives announced last year by Visa, which is
trying to boost merchant adoption by allowing certain retailers to avoid some
annual security assessments while eventually shifting the liability for card
fraud onto the shoulders of merchants who don't upgrade.

Visa's security incentive is set to kick in this October and its liability shift
is scheduled for October 2015.

MasterCard and Visa do not lend or issue cards to consumers; rather, they process
transactions for the banks that issue their cards to customers.

Both companies' plans require the banks that handle card transactions for
retailers, known as merchant acquirers, also be equipped to handle chip-based
cards by April 2013.

MasterCard took into consideration Visa's timeline when establishing its
schedule, McWilton said, adding that merchants, banks and other parties said it
was important to have a uniform roadmap to work toward.

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From: Glenn Petersen2/16/2012 10:43:51 PM
1 Recommendation   of 1691
I have to believe that MicroChips is using RFID technology in their devices, although there is no specific evidence of that in this article or on their website, which is not surprising given the controversy surrounding the insertion of RFID tags into humans.

‘Pharmacy on a chip’ passes test

By Clive Cookson in Vancouver
Financial Times
February 16, 2012 11:00 pm

A wirelessly controlled implant, which delivers precise drug doses into the patient’s body, has had a successful first clinical trial, bringing the possibility of the “pharmacy on a chip” that could transform drug delivery closer.

Researchers used the microchip device to give seven women with osteoporosis daily doses of a bone-strengthening hormone that was normally injected. The results were announced at the start of the American Association for the Advancement of Science annual meeting on Thursday.

The device could transform drug delivery and help usher in a new era of telemedicine – delivering healthcare over a distance – said Robert Langer, a professor at the Massachusetts Institute of Technology where the project started 15 years ago.

“You could literally have a pharmacy on a chip,” he said. “You can do remote control delivery, you can do pulsatile drug delivery, and you can deliver multiple drugs.”

The trial was organised by MicroChips, the MIT spin-out company developing the technology, and carried out in Denmark where there is special expertise in hormone treatment of osteoporosis.

Unlike most drug delivery devices, which release medicine gradually, the new microchip releases doses at specified times. These can be preprogrammed into the device or triggered by a doctor using the wireless communications facility.

Although some diseases are best treated through continuous infusion, others such as osteoporosis and multiple sclerosis, do better with separate shots.

“Patients will be freed from having to remember to take their medication and don’t have to experience the pain of multiple injections,” said Robert Farra, president of MicroChips. “Physicians will be able seamlessly to adjust their patients’ therapy using a computer or mobile phone.”

The device, which is about the size of a heart pacemaker, holds daily doses of a drug inside tiny wells. Each well is covered with an ultra-thin metal membrane, which keeps the drug in place until an electric signal breaks the film and releases it into the patient.

In the Danish trial, the chips were implanted into the abdomen of seven women in their late 60s who were suffering from osteoporosis. The procedure took 30 minutes under local anaesthetic. The implants remained in the patients for four months and caused no adverse reactions.

The researchers triggered the release of 20 daily doses of a hormone treatment called teriparatide in the volunteers. Blood tests measuring biochemical markers of bone health showed that, delivered electronically, the drug improved bone formation and reduced the risk of fracture at least as well as conventional injections.

The company is following up the trial with a programme to develop an implant with a larger capacity, which could deliver hundreds of doses – enough to treat a patient for a year. Although it might be ready to file for regulatory approval in 2014, the device is unlikely to be commercially available before 2016.

The system would not be suitable for replacing insulin injections in diabetes, Dr Farra said, because the volumes of insulin required would be too great. But it should work for many other diseases including multiple sclerosis, cancer and chronic pain.

To make the technology even more useful, the MIT researchers plan to combine it with sensors that can detect biochemical changes in patients’ bodies, which could indicate how well the treatment is working and how much drug is needed.

Copyright The Financial Times Limited 2012

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To: Glenn Petersen who wrote (1569)2/17/2012 11:46:16 AM
From: Glenn Petersen
   of 1691
Impinj's IPO is stalled. The last amendment to their registration statement was filed on July 14, 2011:

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From: Glenn Petersen2/18/2012 12:16:02 PM
1 Recommendation   of 1691
A competing technology that is getting a lot of traction:

Those barcode-looking things? They’re called QR codes. Here’s what they do.

By Stephen Chapman
November 28, 2011, 11:39pm PST

Summary: Have you seen those barcode-looking things recently but haven’t got the slightest what they’re for? After this post, you’ll see how they might just end up making your life a little bit easier one day!

Scan me!

Many of you reading this have undoubtedly seen a QR (Quick Response) code by now (the thing pictured to the right), but there’s just as much — if not more — confusion surrounding them today as there was a number of years ago. Well, prepare to no longer be confused by these highly-useful things that are seemingly popping up everywhere these days (and for good reason, too)!

Put simply, QR codes serve as an ultra-fast reference for something that someone can look up immediately on the spot, or at a later time. By using your cell phone and a QR code reader app, scanning a QR code might yield a Web address, name and address, phone number, email address, pre-filled text message, or some other similar data type. To give you a better visualization of how it works, consider the following 3 short scenarios:

Scenario 1: You’re walking around in a town you’ve never been to before, collecting menus from restaurants that you’re hoping to find some decent local food from. But instead of simply handing out takeaway menus, you notice many of the restaurants are providing an eco-friendly QR code for you to scan to see their menu and effectively have it with you at all times on your phone.

Scenario 2: You’re out at a concert, listening to one of your favorite bands, when all of a sudden, you notice the guitarist is wearing a shirt with a giant QR code on the back of it. Being in the 7th row and knowing what a QR code is, you take out your phone so you can get a picture of it to see what he wants you to see. Lo and behold, you’ve just earned a secret backstage pass right there on the spot that no one else can win now because you were the first to access it!

Scenario 3: You’re flying over a city about 15 minutes out from landing at your destination, when all of a sudden, you notice an incredibly massive QR code that has been painted on the top of an entire building. Once again, you take out your phone and quickly take a picture so you can see what it’s all about (be it a URL, phone number, text message, or otherwise) once you’ve got cell service again.

Those are just a few scenarios, but there are TONS of scenarios that companies and individuals are currently utilizing QR codes for. Just the other night, I was practically inundated by QR codes while out eating dinner at a restaurant: their menu had a QR code on it so you could have a copy to go right there on the spot, the ketchup bottle on the table had a QR code on it so you could visit the manufacturer’s Web site, and someone had printed out a QR code on a sheet of paper and stuck it on the mirror in the men’s restroom.

Now, what do you do when you see a QR code? Well, you either need a camera or a phone with an in-built camera. If you have a phone with an in-built camera, there are plenty of QR code apps you can download from your respective app store/market that will allow you to scan a QR code and it’ll show you the information contained within it. If you only have a camera, then you can simply take a picture of a QR code with which to upload later to a site like ZXing Decoder Online. Lastly, if you’re interested in creating your own QR code, well, that’s just about as easy as decoding one, what with online QR code generators like this one.

For as quick and convenient as QR codes are, they aren’t 100% risk-free, since all kinds of data can be contained within them. Wikipedia spells it out best in their QR code risks section:

Malicious QR codes combined with a permissive reader can put a computer’s contents and user’s privacy at risk. They are easily created and may be affixed over legitimate QR codes. On a smartphone, the reader’s many permissions may allow use of the camera, full internet access, read/write contact data, GPS, read browser history, read/write local storage, and global system changes.

Risks include linking to dangerous websites with browser exploits, enabling the microphone/camera/GPS and then streaming those feeds to a remote server, analysis of sensitive data (passwords, files, contacts, transactions), and sending email/SMS/IM messages or DDOS packets as part of a botnet, corrupting privacy settings, stealing identity, and even containing malicious logic themselves such as JavaScript or a virus. These actions may occur in the background while the user only sees the reader opening a seemingly harmless webpage.

In other words, the information waiting on the other side of a QR code might not be all roses and sunshine — even if it’s something as simple as a derogatory plain text message.

So, with all that said and now that you know everything you need to know to make use of QR codes, what are you waiting for? Start by scanning the QR code you see in the upper right-hand corner of my post (I promise it’s not malicious) and see where it leads to. From there, be on the lookout for QR codes all around you as you’re shopping, eating, vacationing, working, browsing, etc. Before long, they may just start making life a little more convenient for you!

-Stephen Chapman

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To: Glenn Petersen who wrote (1597)2/18/2012 12:23:54 PM
From: Glenn Petersen
   of 1691
The Wilipedia entry for QR Code:

A real life application:

QuickPay Makes Your Smartphone a Parking Attendant

By Keith Barry
February 16, 2012 8:00 am

A service that allows drivers to pay for parking from their smartphones hopes to expand the service to private garages, city streets and even valet services.

San Francisco-based QuickPay partners with parking providers to allow mobile payment and access to private garages and public, metered spaces. In many cases, garage and lot owners and municipalities must only put up QR codes to start receiving payments from people with the QP QuickPay app on their iPhone or Android device.

Users must download the app and enter payment and vehicle information, then scan QR codes to pay for parking or gain access to private lots without parking attendants. For each transaction QuickPay takes a percentage from the user and the facility. The setup is active mostly in California but expanding across the country. The first East Coast location is Boston’s Pi Alley garage, shown above.

“They can pay with credit cards at facilities that normally take only cash, bypass the cashiers, skip taking tickets or worrying about lost tickets, and get e-mail receipts,” said QuickPay chief executive Barney Pell. “For some facilities, they can enter by special lanes, or even get access to locations that are normally available only to monthly parkers.”

Pell said the system will open up access those small, unattended lots and garages that usually cater to monthly parkers. First, the facilities must let QuickPay know rates and what hours they’re open and set up payment information.

“Then to work with their existing systems, we have a proprietary and inexpensive gate-arm kit that we install at each parking entrance and exit gate, which lets our cloud-based system raise the gate whenever a user scans the gate’s QR code with their mobile device,” Pell said.

On public roads, cities and towns can simply post a QR code on a parking meter. Once the user scans the code with a smartphone, his or her license plate info is sent to enforcement so no tickets are issued. While that may require some minor technology upgrades at a systemwide level, it doesn’t require any improvement to meters. Valet parking attendants can use QuickPay-generated confirmation codes to collect payment and keep track of who owns what car.

From the user standpoint, parkers can also use the QP QuickPay app to find open parking spots, look up rates and get directions to garages. Eventually, Pell envisions the app supporting dynamic pricing, where parking rates change depending on demand. Additionally, QuickPay will let parking facilities hold spaces and offer discounts. “Over time, [QuickPay] will support loyalty programs, coupons, advance reservations and much more.”

This morning, QuickPay executives announced that they had received an unspecified amount of funding from Fontinalis Partners, a Michigan investment firm whose founding partners include Ford executive chairman William Clay Ford Jr. QuickPay boss Pell is himself a well-known name in the tech community, having founded numerous companies including Powerset, a search technology company acquired by Microsoft, and Moon Express, a lunar exploration and mining company.

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From: Glenn Petersen3/8/2012 8:49:31 AM
   of 1691
Some speculative numbers from Juniper and a few qualifiers from TechCrunch:

Juniper: NFC Payments To Reach $74 Billion Worldwide By 2015

By Leena Rao
March 8, 2012

As we heard last week, Isis, the carrier-led joint venture between AT&T, T-Mobile and Verizon, is picking up steam in the NFC world to make these payments a reality. And we know Google has made a big bet on NFC as a payments technology. But it’s still unclear whether NFC (near field communication), which allows devices to exchange data over short distances with a wave or a tap, will become a major force. But Juniper seems optimistic that NFC payments will become a huge market in the payments world forecasting that global NFC mobile contactless payment transactions will reach nearly $74 billion worldwide by 2015.

Juniper contends that NFC is increasingly being used for the payment of goods in-store and as transport tickets; and is already over triple the expectation for 2011. Additionally, the firm says that the use of mobile devices as an alternative to credit cards and paper tickets is one of the fastest growing segments of the mobile commerce market.

Juniper’s David Snow explained in the report “Our report demonstrates the spectacular growth we see across all segments of the mobile commerce market. Four of these segments (money transfer, physical goods, NFC and coupons) will more than triple in transaction value over the next three years, whilst digital goods, banking and tickets will still on average, double over the same period.”

The barrier to mobile payments and NFC, says Juniper, are both real and perceived security risks. Even if one application is found to be unsecure, this could throw off the whole market.

Other findings include that SMS is the key to widespread mobile banking service adoption and without interoperability mobile money transfer services will have difficulty gaining a critical mass of users. And while mobile coupons still represent the smallest mobile commerce segment, it is demonstrating the highest growth rate.

Last year, Juniper forecasted that North America and Western Europe together will exceed the Far East region in under three years based on transaction value. And North America and Western Europe will account for 50% of NFC payments market by value in 2014.

Slowly but surely, more companies are incorporating NFC into payments solutions, but there are still questions as to whether NFC will become a dominant technology in the mobile payments landscape of the future, especially when other companies including PayPal, Square and others seem to be shying away from making a big bet on the technology. The other missing component is Apple’s participation in the space, and it’s still unclear if the iPhone maker will be adopting the technology.

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From: Glenn Petersen5/7/2012 11:14:03 AM
   of 1691
Many Competing Paths on the Road to the Phone Wallet

New York Times
May 6, 2012

The idea of using a smartphone as a wallet has been slow to catch on in the United States. A big part of the problem has been that most stores do not have the proper physical equipment to allow customers to pay by tapping their phone.

These stores also do not have the right equipment to allow the use of smart cards, credit cards embedded with computer chips that are much less susceptible to fraud.

But a change is coming that will push both innovations at the same time.

Merchants are facing heavy pressure to upgrade their payment terminals to accept smart cards. Over the last several months, Visa, Discover and MasterCard have said that merchants that cannot accept these cards will be liable for any losses owing to fraud.

“Everybody is going to be upgrading,” said Jennifer Miles, an executive vice president at VeriFone, which provides payment terminals to most merchants in the United States.

While updating the terminals for smart cards, VeriFone also plans to upgrade for smartphone wallets, providing the capability for near-field communication, the technology used by the Google and Isis wallets, the two biggest smartphone wallet projects.

Before the credit card companies made their announcements, almost no merchants were buying terminals with smart card and N.F.C. capabilities, Ms. Miles said. As of January, though, VeriFone stopped installing terminals that did not have N.F.C. readers. Moving to N.F.C. is a windfall for VeriFone, considering that the new systems cost 10 to 30 percent more than standard ones.

It is also a boon for Google and Isis, a cooperative venture of AT&T, Verizon and T-Mobile. Google Wallet has been severely limited by a lack of N.F.C.-enabled merchants and phones. Isis, meanwhile is planning to start service later this year in only two cities, Austin, Tex., and Salt Lake City.

It picked Salt Lake City largely because its public transportation system had already installed N.F.C. readers, said Ryan Hughes, the chief marketing officer at Isis.

“This was a gift, to be honest, that was sitting under our Christmas tree that we didn’t anticipate,” he said, of the recent moves by the credit card companies and VeriFone.

Ms. Miles of VeriFone now believes that N.F.C. could be completely mainstream within five years. While that sounds speedy by some standards — she notes that debit cards took about four times that long to take hold — other companies pursuing mobile wallets are not willing to wait.

Square, a start-up founded by Jack Dorsey of Twitter, has gained a foothold among small merchants by distributing a free credit card swiper that attaches to a smartphone or tablet, allowing these swipers to serve as their own payment terminals. The company now sees its relationships with merchants as a way to promote its own mobile wallet application, which it revamped in March.

Called Pay With Square, the app tells users which merchants nearby accept Square. When a customer enters those stores, the application alerts the merchant, who can then accept a payment by confirming the person’s identity through the photograph associated with the account.

PayPal meanwhile, is trying to move its popular online commerce accounts into the physical world. It recently began passing out Square-like devices, although its version is triangular. In addition to credit cards and checks, PayPal’s system also allows merchants to accept payment via PayPal accounts by typing in their personal identification number.

Both PayPal and Square say that asking customers to buy N.F.C.-enabled phones and wait for merchants to install new hardware is folly. Neither company says it has plans to incorporate N.F.C. into its wallet.

“If I were a device manufacturer, or a device operator, and that was the tool that I had at my disposal to enter the payments market, that might be the thing I pushed,” Sam Schrauger, PayPal’s former vice president for global products and experience, said in an interview shortly before he left the company in April.

But the other systems have inherent weaknesses as well. Because they rely on a wireless data connection, they are vulnerable to service interruptions. Also, some analysts question whether passing out free hardware will be tenable once merchants have to accept smart cards, because these readers are expected to be significantly more expensive to manufacture.

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From: Glenn Petersen5/25/2012 10:09:04 AM
   of 1691
Students will be tracked via chips in IDs

By Francisco Vara-Orta
Updated 11:44 p.m., Thursday, May 24, 2012

Northside Independent School District plans to track students next year on two of its campuses using technology implanted in their student identification cards in a trial that could eventually include all 112 of its schools and all of its nearly 100,000 students.

District officials said the Radio Frequency Identification System (RFID) tags would improve safety by allowing them to locate students — and count them more accurately at the beginning of the school day to help offset cuts in state funding, which is partly based on attendance.

Northside, the largest school district in Bexar County, plans to modify the ID cards next year for all students attending John Jay High School, Anson Jones Middle School and all special education students who ride district buses. That will add up to about 6,290 students.

The school board unanimously approved the program late Tuesday but, in a rarity for Northside trustees, they hotly debated it first, with some questioning it on privacy grounds.

State officials and national school safety experts said the technology was introduced in the past decade but has not been widely adopted. Northside's deputy superintendent of administration, Brian Woods, who will take over as superintendent in July, defended the use of RFID chips at Tuesday's meeting, comparing it to security cameras. He stressed that the program is only a pilot and not permanent.

“We want to harness the power of (the) technology to make schools safer, know where our students are all the time in a school, and increase revenues,” district spokesman Pascual Gonzalez said. “Parents expect that we always know where their children are, and this technology will help us do that.”

Chip readers on campuses and on school buses can detect a student's location but can't track them once they leave school property. Only authorized administrative officials will have access to the information, Gonzalez said.

“This way we can see if a student is at the nurse's office or elsewhere on campus, when they normally are counted for attendance in first period,” he said.

Gonzalez said the district plans to send letters to parents whose students are getting the the RFID-tagged ID cards. He said officials understand that students could leave the card somewhere, throwing off the system. They cost $15 each, and if lost, a student will have to pay for a new one.

Parents interviewed outside Jay and Jones as they picked up their children Thursday were either supportive, skeptical or offended.

Veronica Valdorrinos said she would be OK if the school tracks her daughter, a senior at Jay, as she always fears for her safety. Ricardo and Juanita Roman, who have two daughters there, said they didn't like that Jay was targeted.

Gonzalez said the district picked schools with lower attendance rates and staff willing to pilot the tags.

Some parents said they understood the benefits but had reservations over privacy.

“I would hope teachers can help motivate students to be in their seats instead of the district having to do this,” said Margaret Luna, whose eighth-grade granddaughter at Jones will go to Jay next year. “But I guess this is what happens when you don't have enough money.”

The district plans to spend $525,065 to implement the pilot program and $136,005 per year to run it, but it will more than pay for itself, predicted Steve Bassett, Northside's assistant superintendent for budget and finance. If successful, Northside would get $1.7 million next year from both higher attendance and Medicaid reimbursements for busing special education students, he said.

But the payoff could be a lot bigger if the program goes districtwide, Bassett said.

He said the program was one way the growing district could respond to the Legislature's cuts in state education funding. Northside trimmed its budget last year by $61.4 million.

Two school districts in the Houston area — Spring and Santa Fe ISDs — have used the technology for several years and have reported gains of hundreds of thousands of dollars in revenue for improved attendance. Spring ISD spokeswoman Karen Garrison said the district, one-third the size of Northside, hasn't had any parent backlash.

In Tuesday's board debate, trustee M'Lissa M. Chumbley said she worried that parents might feel the technology violated their children's privacy rights. She didn't want administrators tracking teachers' every move if they end up outfitted with the tags, she added.

“I think this is overstepping our bounds and is inappropriate,” Chumbley said. “I'm honestly uncomfortable about this.”

Northside has to walk a tightrope in selling the idea to parents, some of whom could be turned off by the revenue incentive, said Kenneth Trump, president of National School Safety and Security Services, a Cleveland-based consulting firm.

The American Civil Liberties Union fought the use of the technology in 2005 at a rural elementary school in California and helped get the program canceled, said Kirsten Bokenkamp, an ACLU spokeswoman in Texas. She said concerns about the tags include privacy and the risks of identity theft or kidnapping if somebody hacks into the system.

Texas Education Agency spokeswoman DeEtta Culbertson said no state law or policy regulates the use of such devices and the decision is up to local districts.

Twitter: @fvaraorta

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From: Glenn Petersen6/18/2012 8:40:12 AM
1 Recommendation   of 1691
SQuare deal

After many false starts, QR codes are finally taking off

The Economist
Jun 16th 2012

CEREAL boxes are, by and large, poor works of literature. Yet many people sit at breakfast reading them over and over again. Last year Kellogg’s realised it could make its packets more entertaining—and guessed that people also had their phones to hand (anything beats talking to the family). The cornflake-maker put 2D codes, better known as QR (for quick response) codes, on its Crunchy Nut boxes in America. When scanned, these took cereal-munchers to a video of dawn in, say, Washington state. The idea was to push cereal as an all-day snack: “It’s morning somewhere.”

QR codes—squares of black-and-white patterns—have much to recommend them. They store far more information than plain, old bar codes. For example, they can fit in web addresses and logos. And they are cheap. They have been popular in Japan for years, but elsewhere have for a while been touted as the next big thing. (In 2009 this newspaper said they were “on the point of breaking out”.)

Over the past year, QR codes have quietly slipped into the marketing mainstream. Three-quarters of American online retailers surveyed by Forrester, a research firm, use them. In April nearly 20% of smartphone users in America scanned one, up from 14% in May last year (see chart 1). According to comScore, another research company, more than two-thirds of Americans and Europeans who scan QR codes do so in order to obtain information about a product. Japanese smartphone-owners, by contrast, are most likely to download a discount coupon or a special offer (see chart 2).

Scanlife, a provider of QR code services, saw the number of unique users scanning codes through its system triple in the year to March. One reason for the rise is the proliferation of smartphones with high-quality cameras and the corresponding decline in data charges. It also took time for people to realise why advertisements contained mutant crosswords. And perhaps most important, marketers have only now worked out how best to use QR codes. Simply sending customers to the company website is not enough, says Melissa Parrish, an analyst at Forrester. In-store promotions are catching on. Coupons are always popular. Real-world treasure hunts have also been successful.

For marketers, QR codes bridge the gap between offline and online worlds. Customers who use them are, in effect, asking to be told more about the company. The success of a campaign is easy to measure by the number of scans. Expect to see a lot more of those funny little black-and-white patches.

from the print edition | Business

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From: Glenn Petersen7/3/2012 6:16:50 AM
   of 1691
QR Code Fatigue

By Mark Milian
Bloomberg Businessweek
on June 28, 2012

When 29-year-old manufacturing worker Michael Hellesen sees a Quick Response code around his hometown of Racine, Wis., he sometimes scans it using an application he downloaded to his Google ( GOOG) Android smartphone. More often than not, it takes Hellesen to a brand’s website. “About 80 percent of the time, I’m disappointed that I scanned it,” Hellesen says. “Mostly it’s just curiosity at this point. I’m not actually expecting anything useful.”

QR codes are dense grids of black-and-white boxes, a more sophisticated cousin to the bar code that can hold 100 times more information. The tags can be put to many uses—inventory tracking, event ticketing—but no one has embraced them more visibly than advertisers. They pop up at stores, on posters, and in magazines to deliver coupons or direct shoppers to websites with more product details. QR codes convey “the appearance of being tech savvy,” says Thaddeus Kromelis, a strategist at WPP’s ( WPPGY) Blue State Digital, which has done work for Barack Obama’s presidential campaigns. Over the last couple of years they’ve become much more common; in December 2011 they appeared in 8.4 percent of all magazine ads, up from 3.6 percent at the start of the year, according to marketing firm Nellymoser.

That ad trend may be reversing as more consumers, like Hellesen, realize QR codes aren’t always worth the effort it takes to whip out a phone. According to Forrester Research ( FORR), only 5 percent of Americans scanned a QR code between May and July of last year, the latest data available. “Advertisers are looking at every way possible that they can connect with consumers,” says Patti Freeman Evans, the analyst who edited the report. “Consumers aren’t saying, ‘Oh, I really want to be able to connect with companies and brands.’”

As a result, advertisers’ “initial enthusiasm has tempered,” says Chia Chen, a senior vice president at the Publicis Group’s Boston-based Digitas. He estimates that 15 percent of his clients still use the codes. At WPP’s Possible Worldwide, less than a fifth of clients have shown any interest in the tags this year, says Anders Rosenquist, the agency’s director of emerging media. Both numbers are down, the firms say. Last year, Google halted a campaign in which it mailed QR-code stickers to retailers that would lead scanners to listings on the search company’s site for local businesses.

QR codes have always had limitations as advertising tools. They can only be used by smartphone owners, who have to download an app and hold their phone steady to capture a clear image. The process doesn’t work well with faraway billboards or in low lighting, and it requires cellular service. For some reason, advertisers have put them on posters found in subways and in United Continental’s Hemispheres In-Flight Magazine, places where travelers usually don’t have reception. Such examples have made QR codes the butt of jokes. A blog called WTF QR Code contains photos of poorly placed codes that no one could reasonably be expected to scan, such as on a billboard along the highway or inside a liquor bottle. Another blog called Pictures of People Scanning QR Codes has garnered hundreds of fans. The site contains no posts.

Engendering brand loyalty was never the intention of the small Tokyo-based team that invented the technology in 1994 at Denso Wave, a subsidiary of Toyota Group. The company created the square codes to improve inventory tracking for auto parts, says Koji Fujiyoshi, an executive there. Denso Wave patented its creation and published the specification online, allowing anyone to use QR codes for free. Some organizations have found creative uses for the technology. A wildlife refuge in Sanibel, Fla., has QR codes situated along its trails to give visitors more information about the animals they see, according to Toni Westland, a ranger there. Rock the Vote is putting codes on T-shirts the organization is giving away at concerts this summer. Scanning them leads to voter registration forms, says Heather Smith, the organization’s president.

To put it charitably, advertisers have been, well, less creative. “Very few people want to visit your corporate website to begin with,” says Kelli Robertson, a director at AKQA, a digital ad agency acquired by WPP on June 20. “Fewer want to do it when they’re out in the world or reading a magazine.”

Even without advertisers, the QR code might thrive. Online ticket site Fandango says about 13 percent of the movie theaters it works with have installed QR-code readers to scan tickets displayed on smartphones. That number is expected to reach 25 percent by the end of the year, says Jessica Yi, Fandango’s product chief. And smartphone ticketing will get a boost from Apple ( AAPL) this fall when the next version of its iPhone operating system is released. The new software includes a feature called Passbook, a digital wallet to store boarding passes, coupons, movie tickets, and gift cards—many of which rely on QR codes. Passbook “will raise awareness” for QR codes, Yi says. “That’s the great thing that Apple brings to the table.”

Meanwhile, Denso Wave is working on what it calls “the next generation of QR codes,” including versions that are smaller and can securely transmit encrypted data. One could even help crack down on counterfeit goods, Fujiyoshi says. And there will always be people who put the existing version of the QR code to unconventional uses. David Quiring, the Seattle owner of a headstone shop, sells a $75 service that lets families set up websites devoted to their dearly departed. Those can be accessed by scanning QR-code stickers on tombstones. He ends up having to explain what a QR code is to every customer, and less than 30 percent of them buy the sticker, he says. “I’ve been trying to continue the move forward by actually bringing monuments into the 21st century,” he says. “Nobody knows this technology is out there.”

The bottom line: QR codes are increasingly used for smartphone ticketing and other purposes, but they’ve been largely ineffective as advertising tools.

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