Despite the rejection of Apple to Near Field Communication for the iPhone 5, mobile payments using this technology will still reach $191 billion in 2017 from the $4 billion in 2012. The $100 billion mark is said to be broken by 2016, according to ABI research.
An NFC device that can handle all types of mobile payments like proximity, P2P, and online can jumpstart market convergence, although not yet ready for mass commercial roll out, the potential value increase of this technology has already been studied and determined.
If this convergence will be successful, payment networks, device OEMs, MNOs, partnering service providers, and smart card and IC vendors will surely benefit.
Only 2 percent of merchants all around the world have NFC-reader terminals, not enough to value Apple’s attention. Apple continues to use its Passbook mobile payment software which relies on transmitting payment data through barcodes.
According to Phil Sealy, the market will start to converge in using NFC technologies two years from now at the least.
On the other hand, ABI believes that ticketing and transportation will be the first to benefit from the convergence. Contactless ticketing application will be available to 26 percent of all NFC handsets by 2017.
However, there are still barriers that must be addressed to ensure the convergence’s success, according to John Delvin.
- Payments made through NFC in 2012: $4 billion
- Payments estimated made through NFC in 2017: $191 billion
- NFC payments to hit the $100 billion barrier in 2016
- In 2012, only 2% of merchants have NFC reader terminals
- In 2017, an estimated 26% of NFC handsets will have contactless ticketing apps
John Devlin, Practice Director Storm Technologies: “There remains a number of barriers and limiting factors that need addressing before convergence success. The business models have not yet been clearly identified and proven with no real-world case studies to demonstrate the potential returns.”
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