December 4, 2013
In the past few years, Near Field Communication (NFC) technology has been a subject of debate. It went through the bull cycle and this year it was felt by many that it is having a hard time. Various analysts, reports and payment experts had downgraded their outlook about NFC uptake as a payment enabling technology. In one of the most popular instances a research firm had also revised the estimates for Global NFC market (forecasts) lowering the figure to $110 Bn by 2017 from earlier estimates of $180 Bn. However, I am going to present a case below to the industry(s) and pose a few questions: Were the Analysts wrong? Is NFC back as a mode of payment?
A lot of cynicism about NFC revolves around three key notions - limited mobile devices with NFC, non availability of NFC Infrastructure (terminals) and lots of pilots but no mass deployments. Add to that some issues with big products based on NFC such as ISIS and Google Wallet. Maybe add Apple staying away from NFC (for the time being).
More and More Devices are being shipped with NFC
Lets look at some numbers. According to the Strategy Analytics, the NFC capable smart phones are expected to be nearly 400 Mn by the end of 2014. There is large market opportunity to create contactless payment applications, integrate NFC into connected home and car products, mobile wallet services and develop other innovative services that will trigger consumer demand for NFC.
Tap and go payments enabled through mobile devices with Near Field Communication (NFC) technology are gaining widespread momentum with nearly 50% of all smartphones launched by 2015, to be NFC enabled. This would mean that 1 Bn NFC based handsets will be sold worldwide by 2016 which will support $50 Bn worth of transactions; approximately 15 Bn NFC tickets will be delivered to mobile devices worldwide by 2014 and around 300 Mn NFC enabled smartphones, tablets and eReaders will be sold in 2013, according to a report by AT Kearney.
Even if your phone doesn't have a NFC chip, you can use stickers. Australia’s Bankmecu and card issuer Cuscal have completed an NFC payment sticker trial, enabling consumers to make contactless payments at Visa payWave terminals using a smart sticker stuck to their phone. Bankmecu now plans to further test the service before launching it to its wider cardholder base in the next few months.
Carriers are putting more NFC enabled Sim Cards
In November 2013, Vivo (Brazilian Mobile Operator) partnered with Gemalto to provide Trusted Services Manager (TSM) platform for its NFC based m-payments implemen ...