One quarter of mobile users will pay with NFC by 2017

As a technology Near Field Communication (NFC) has been kicking around for a while now — Nokia’s 6131 was the first NFC-enabled phone and launched all the way back in 2006 — but mass adoption has been slow.

All that’s about to change.

According to a new report from tech analysis company Juniper Research, more than one in four mobile users in Western Europe and the US will make in-store payments using NFC by 2017. That’s massive growth, considering that only two percent will do so this year.

The company reckons that this is largely down to an increasing number of NFC payment pilots around the globe transitioning to full commercial service being spearheaded by both mobile network operators and financial institutions.

It also says the ability to ‘tap’ a phone and make a payment has massive appeal for people. This user appeal could see NFC take the lead over other mobile payment systems. The fact that NFC payments can also integrate with other NFC applications, such as metro ticketing, doesn’t hurt either.

For mobile wallet providers and partners meanwhile NFC payments provide new and personalised retail marketing and sales opportunities above and beyond the capabilities of debit or credit cards.

This mass consumer and business appeal, says Juniper Research, means that NFC payments will value in excess of US$171-billion by 2017. That’s a significant chunk of the US$617-billion fellow research company Gartner predicts will be moved via mobile at around the same time.

The company warns, however, that NFC retail payments services must be deployed with a fully integrated and tested customer care channel. NFC payments are a complex fusion of mobile, financial and retail technology; a single point of contact to take responsibility for resolving a problem quickly and efficiently must be established or users will desert the service.

According to Juniper Research’s Dr Windsor Holden, “NFC retail payments are still at an early stage, but hold great promise. In 2011 we saw significant strides made within the ecosystem such as the launch of Google Wallet, the announcements of more mobile wallet consortia and the supply of an increasing number of NFC-enabled smartphone models. NFC is now impacting the public consciousness and we expect a rapid market expansion from 2012 onwards.”