NFC Payments: 5 Facts about the Bright Future
NFC (Near Field Communication) technology enables a secure wireless exchange of information between two devices over a very short distance (within a few inches). It is ideal for transmitting small amounts of data with minimal set-up time and power consumption. NFC has a great potential for a wide array of uses, especially for mobile payments.
At the moment, Near Field Communication is being increasingly used for the payment of goods in-store and as transport tickets. Over time NFC can phase out signature- and PIN-based cards.
Here are 5 supporting facts about the bright future of NFC as a technology for digital money transfers:
1. Consumer appeal. The allure of NFC technology is its simplicity. To complete a transaction in the NFC-based mobile payment system the user has to wave a smartphone over a POS terminal with NFC reader, or tap the phone against it. (The system would work only with mobile devices that have special NFC chips.) NFC gives consumers the option of using mobile devices to make easy, convenient and secure everyday payments.
2. Going mass-market. Mobile devices are carried more rigorously than wallets and purses. Therefore, it makes sense to use connected mobile devices for making "tap and go" payment transactions. According a recent report by Gartner, the number of people using mobile payment services is supposed to reach 212.2 million in 2012 (up from 160.5 million in 2011) and 448 million users by 2016.
3. Up to 700 million NFC handheld devices in 2016. NFC is already widespread in Japan, South Korea and some African countries. If to take the US, analysts suggest that it will take 3 to 5 years for the technology to become mainstream in this country. According to a research report by Berg Insight, a Swedish analyst firm, global sales of handsets featuring Near Field Communication reached 30 million units in 2011. In 2016 shipments are forecast to come up to 700 million units.
4. Accelerating rollout of NFC-ready payment infrastructure. Berg Insight indicates that the market for NFC-ready POS terminals grew fiercely in 2011. The Swedish research firm also suggests that the global installed base of NFC-ready POS terminals will increase at a compound annual growth rate (CAGR) of 49.4 percent from 3.9 million units in 2011 to 43.4 million units in 2017.
5. NFC contactless payments may hit US$180 bn in 2017. Contactless payments are still at an early stage, but hold great promise. Wider adoption of NFC-enabled smartphones and terminals will boost the volume of contactless payments. According to a new forecast from Juniper Research, NFC mobile payments will exceed US$180 billion worldwide in 2017.
Near Field Communication is transforming mobile phones into payment devices. This can greatly improve the way we live and work.