NFC, Efficiency, and MarketsPosted on by Timothy Boyle
In the Russia’s eighth largest city of Kazan commuters can now use NFC technology to pay for their many transportation needs. This new city-wide adoption is a great lesson in the possibilities of NFC and a great case study in how free-markets can and do work.
Quite often you hear people make the case for centralization and top-down regulatory standards as the only way to have an efficient market; ignoring of course the likely possibility that the individuals determining the top-down standards are not infallible and thus their poor decisions affect everyone in the market and often times distorts the market and can hurt efficiency. The city of Kazan and their many mobile network operators however, have proved this nonsense wrong and agreed to work together to create a mobile payment system compatible for all transport systems without the help of regulatory busybodies using government coercion. Proving once again that individuals through voluntary means and without force can, and will, improve market efficiency and improve that state of mankind.
This is also another great example of the uses of NFC technology. How the system will work is that each subscriber purchases a NFC SIM card for their phone. Each NFC card has a corresponding account that the user deposits money into. When they wave their phone in front of one of the ticketing machines their account is then charged. When their account gets low, down to $1.52 in US FRN’s or 50 rubles, $3.04 in US FRN’s or 100 rubles, is automatically transferred into their account from their mobile carrier account.
This sort of payment method has already been arranged in other Russian cities with great success, and NFC payment has quickly become the main method of transportation payment. And with this new payment method comes lower overhead costs, lower transportation costs, saved time, and in the end economic progress.
Other companies and cities would be smart to adopt this system for transportation and other similar uses if they wish to increase profits, decrease prices and provide greater value to their customers.
Just make sure you use a company that can help ensure your specific needs are met and help you through the process of transferring into the 21st century.