More than 100m people around the world will use an NFC handset to make a purchase this year, according to a new report from Strategy Analytics, and the value of transactions conducted via NFC handsets will grow from US$30bn in 2016 to US$45bn in 2017, US$70bn in 2018, US$110bn in 2019, US$160bn in 2020 and US$240bn in 2021.
“Increasing competition between mobile wallets from device vendors Apple and Samsung, payment card issuers, and mobile operators, combined with a maturing contactless payment infrastructure across most regions, will finally catalyze in-store handset-based NFC purchases,” the analysts say. “Furthermore, Strategy Analytics expects consumer readiness to adopt mobile payments to improve as providers of mobile wallets increasingly support coupons and loyalty cards.”
“Rising overall adoption of contactless payments will boost handset-based contactless payments, but underlines a strong need for mobile wallets to differentiate from cards,” the authors of ‘Mobile NFC Payment Forecast Update: 2004-2021’ add.
Strategy Analytics is encouraged by rising use of contactless payments over the past 12 months, particularly in cities like London where the acceptance of contactless payments has become nearly ubiquitous, says Strategy Analytics’ Nitesh Patel.
“Transport for London has highlighted the importance of wide reaching contactless payment acceptance in driving adoption and use,” Patel explains. “With 3% of all journeys paid for using contactless driven by mobile phones in December 2015, just six months after the launch of Apple Pay, it is clear that NFC-based payments have strong potential for future growth.”
“Handset-based contactless payment needs to go beyond the convenience offered when paying by contactless cards,” Strategy Analytics’ David Kerr adds. “The success of non-NFC based mobile payment services from Starbucks shows that combining loyalty and offers into mobile payment applications provides incentive for users to switch to mobile wallets.
“Additionally, with recent Strategy Analytics’ user research highlighting security concerns as a key barrier of mobile payment adoption, it is clear mobile wallet providers must continue to educate consumers about the additional security provided by biometric authentication and tokenization.”