NFC’s been kicking around for a few years now — Nokia’s 6131 was the first phone to come with it and launched all the way back in 2006 — but it’s never really fulfilled its potential as a payment mechanism.
It seems, however, that the technology’s time may finally have come.
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According to a new report from tech analysis company Juniper Research, NFC retail payments will exceed US$180-billion globally by 2017, more than a seven-fold increase over 2012.
The company reckons the turning point for NFC came in 2011. This down to a number of factors, including the finalisation of major technology infrastructure standards, many mobile network operators committing to the market and the fact that NFC payment pilots from both mobile operators and financial institutions transitioned to commercial service.
More importantly NFC-enabled smartphone models were announced by almost all handset manufacturers and Google ignited the market by launching its wallet in the US.
There are however, still a few hurdles to overcome. In particular, retailers are less convinced of the benefits of NFC payments over existing card technologies and are unwilling to invest in contactless infrastructure so soon after the transition to CHIP&PIN. Education and “win-win” propositions from other ecosystem players are necessary to make retailers as committed to this opportunity as themselves.
According to Juniper Research’s Dr Windsor Holden, “This is a critical time for the NFC retail payments market. Despite the significant progress being made today, the full potential of the market can only be fulfilled if all ecosystem players are equally committed and mobile wallet consortia remain in place.”
