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I'm Drew Breunig and I obsess about technology, media, language, and culture. I live in New York, studied anthropology, and lead strategy at PlaceIQ.

These are reactions to things I feel are important.

NFC Payment Systems are Just Another CueCat

The CueCat and Google Wallet

NFC payment systems, like Google Wallet, remind me of the CueCat.

Launched in 1999, the CueCat was a little plastic cat (really) that let you scan proprietary barcodes on magazine advertisements or other printed material. Scanning a “cue” launched an advertiser’s webpage. Despite $185 million invested , the CueCat was a spectacular failure.

In hindsight, the CueCat’s fate is hardly surprising. But at the time the potential benefits for incumbent companies overshadowed the fact that no one would ever want to use a CueCat. Rather than examining the CueCat’s use case (and realizing it’s absurd), investors focused on the possible outcome: that magazine advertisements and other businesses based on printed material would not only survive the rise of the internet, but thrive by using the web to provide data regarding audience engagement (a brass ring for advertisers if there ever was one). The billion dollar print industry would be saved and everything would remain the same for the media incumbents.

Of course none of this came to fruition. No one used the CueCat1 and Digital Convergence, the company behind the system, folded.

NFC payment systems remind me of the CueCat because they provide very few benefits for users but promise their investors protection from digital disruption. The allure of such protection is sufficient to spur investment, PR, and partnerships. Media companies backed the CueCat in an effort to preserve print and now financial transaction companies are funding NFC systems in an attempt to save point of sale systems and the counters they reside upon.

To quickly situate ourselves let’s consider the counter, a fairly recent invention. For background we’ll turn to Wolfgang Schivelbusch, who chronicled the rise of the counter/bar in restaurants in his book Tastes of Paradise.

Initially the restaurant was identical to the kitchen of the house. Cooking, hosting, dining, and commerce took place in a single setting, organized around the hearth. But around 1800 the restaurant became separated from the host’s quarters, and the counter or bar grew from a small transaction point to a larger, central delineation between the two areas. Schivelbusch writes of the bar:

With this new piece of furniture the restaurant once and for all shed its cozy private character. The bar, like the counter, was never found in private households. Restaurants would now be divided into two areas—the space behind the counter where the innkeeper did his business, and the actual restaurant.

[The bar is] a genuine product of the Industrial Revolution… The bar sped up, i.e., shortened, the length of a drinker’s stay in the bar. Liquor is not consumed slowly in long sips, but abruptly ‘tossed off.’ The process is so quick that it can be performed standing up. Because of their bars, the gin places that were springing up like mushrooms in Manchester and other English industrial cities at the start of the nineteenth century resembled factory assembly lines. One such establishment in Manchester served over 400 customers an our. In a single week the fourteen largest gin palaces in London served 270,000 guests—almost a metropolis unto itself. Thus it seems no exaggeration to characterize the bar as a traffic innovation.”

The bar and the counter emerged because the scale of service demanded it. The bar evolved into a long, prominent structure to most efficiently handle the largest number of customers. 200 years later, long counters dedicated to transactions still divides retail rooms into public and private zones.

But with personal, networked computers in our pockets we are presented with an opportunity to revisit the bar/counter arrangement. Mobile payment solutions could be more efficient than the long bar or counter without limiting the interior arrangement of our spaces.

The Apple Store is already embracing this opportunity by arming wandering sales staff with mobile payment systems to accept credit cards anywhere on the floor. Payment now occurs right at the conclusion of a conversation about a product, not as a process unto itself. Further, a recent update of the Apple Store iOS application grants the transaction privileges to the shopper, whom can now scan and pay for their wares (via their iTunes account) without intervention. The environment created by this payment is system is one of trust: the first time you self-pay and walk out feels weird and invigorating. I’ve watched more than a few people nervously ask a staff member if for permission to leave following a self-transaction.

Square’s Card Case system is similar as well. My morning coffee is paid for by opening an app and asking the host to put it on my tab. The transaction is more social than monetary, which is easily Square’s best feature.

On the other hand NFC solutions, like Google Wallet, reenforce rather than reinvent consumer spaces. A central point, a place to tap your phone, is still required, which is being rolled out as an extension of current point-of-sale systems. To the user the only difference between paying with Google Wallet and a credit card is whether they tap or swipe. The terminal is the same, the counter remains, people still have to wait in line2, Visa takes the same cut, and the consumer benefits are thin.

Sure, NFC enthusiasts will counter that the data provided to the user is worth the change, but such information is of niche interest and could be provided regardless (my Mint app updates when I swipe plastic). And even if NFC is widely adopted, it’s not as if we’ll all suddenly stop carrying wallets for cash, driver’s licenses, and more. The benefits of an Apple or Square like system (no lines, pleasant sociability, better store layouts, and an atmosphere of trust) greatly trump the consumer benefits of any NFC prototype we’ve yet to see.

NFC benefits incumbent companies and systems, not users. Like the CueCat’s investors, NFC payment proponents hope a dongle will shield their unchanged, underlying systems (and the profits they provide) from digital disruption. NFC will continue to be bundled into many phones, just as CueCat shipped with many magazines. I’d wager they’ll have similar adoption rates.


  1. No one used the CueCats except me and my friends whom helped ourselves to unclaimed CueCats at our local Radioshacks in an attempt to crack the bar codes on the back of our junior high school IDs. 

  2. It’s a bad sign that the one place I regularly see Google Wallet terminals is Duane Reade, home to the 2nd most consistently unpleasant check-out experience. (Fry’s is easily #1) 

17 notesShowHide

  1. jhguth reblogged this from dbreunig and added:
    This is a great read
  2. iriedread reblogged this from petervidani
  3. maybehunterpryor reblogged this from petervidani
  4. virginsonstrike reblogged this from petervidani
  5. petervidani reblogged this from dbreunig and added:
    Nice post, Drew.
  6. dbreunig posted this