Published on: 5th Nov 2014
There will be more than half a billion mobile users of NFC (Near Field Communication) contactless payment services by the end of 2019, up from 101 million this year, according to a prediction from Juniper Research.
The report argued that Apple’s introduction of an NFC-based payment mechanism — Apple Pay — would stimulate the wider marketplace, helping to address the key challenges of contactless awareness and acceptance.
At the same time, the report observed that NFC solutions utilising HCE (Host Card Emulation) were steadily gaining traction within the banking sector. It said that several — including BBVA and Bankinter in Spain and CUA in Australia — had already launched commercial services, with pilot schemes in operation in countries such as Russia and New Zealand.
Network Operator Role Under Threat
However, the report pointed out that both these developments threatened the opportunity within NFC for MNOs (mobile network operators). With Apple Pay, the secure element is embedded on the handset and controlled by Apple; with HCE, the SE (secure element) no longer has to be physically present in the handset, again removing the requirement for MNO involvement.
According to report author Dr Windsor Holden, “We would envisage that while NFC deployments and consumer activity will be buoyed by these developments, the opportunities for network operator involvement are limited. Hence we are likely to see more operators re-evaluating their existing commitments to NFC and possibly withdrawing from the space.”
Other findings from the report include:
- Three quarters of smartphones worldwide will contain an NFC controller chip by the end of the decade.
- While NFC can offer retailers a strong value proposition in terms of customer retention and loyalty opportunities in addition to payment, most retailers remain unclear as to its tangible benefits.