Cellum Insights

Will Bluetooth low energy live up to high-energy hype?

As we outlined in last week’s post on predictions for the future of mobile payments, innovations in the industry tend to follow a standard arc, with a strong initial buzz followed by a pause for customer education. Sometimes, however, the reality never matches the hype, and what is touted as a major technological breakthrough turns out to be of marginal utility, or even wrong turn.

So with the industry right now focusing so much attention on the wireless technology known as Bluetooth low energy, it is time to ask whether BLE is likely to meet – or even exceed – the expectations heaped on it.

beacon

As its name suggests, BLE is a lower-power version of the now-ubiquitous “classic” Bluetooth short-wavelength radio standard, allowing mobile devices to communicate with tiny transmitters called “beacons” (pictured above) over a limited range comparable to wifi, and with minimal power drain. According to the non-profit consortium that manages the standard, BLE will be available on upwards of 90% of Bluetooth-enabled smartphones within the next four years.

One reason for the excitement over the mobile payment possibilities opened by BLE is its parallel utility as a method for “pushing” messages to consumers in stores and other defined spaces. The most discussed such use case involves Apple’s “iBeacon” system, which can alert and pinpoint customers’ phones within the company’s stores, but more generic uses of the technology are as numerous as they are obvious. Being able to hone in on – and send messages to – specific customers as they browse or even walk by is something that millions of businesses could find invaluable. So the excitement over BLE is bigger than just its potential applications in the area of payments.

As for why BLE is considered by some an invaluable addition to the mobile payments arena, it boils down to a merchant’s ability to take the initiative. Currently, the two most common ways a mobile payment is initiated require either some “work” on the part of the customer (scanning a QR code), or the customers’ immediate proximity to a point of sale terminal (the “tapping” of a near-field communication-enabled device). But with BLE, the mobile user could in certain circumstances be singled out – perhaps before they have decided to make a purchase – and then prompted to make a payment, without scanning any codes or being in “bump” distance from a POS terminal.

Naturally, it is in the “certain circumstances” where things get a little sticky. For one thing, the customer would have to already have installed and enabled an application that can be triggered by the relevant BLE beacon. Meanwhile, in most retail use cases the merchant would still be required to at least verbally confirm the customer’s ownership of a mobile device that has been passively “checked in” via BLE. (In a few use cases this might not be necessary; for example, beacons can be modified so that they only cover a single table in a restaurant.)

This means that, just as with QR and NFC, BLE is unlikely to emerge as a “holy grail” capable of handling all mobile payment use cases. Instead, it will be an important new tool which will compliment rather than replace NFC and, especially, QR, which will remain crucial for initiating remote mobile payments. This is why Cellum is partnering with other leading global tech firms to develop BLE-based solutions while still devoting significant resources to helping clients make the most of QR and other technologies.

Meanwhile, as frustrating as the BLE hype may be to some who have lived through previous rounds of overpromising, the period of education that is now following will help to bring the mobile payments future closer to today.

One thought on “Will Bluetooth low energy live up to high-energy hype?

  1. Pingback: A quick bite out with BLE and Cellum (VIDEO) | MOBILE PAYMENTS BLOG

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