Wave goodbye to the wallet: NFC payments to reach $50bn by 2014
Big telcos committed to making NFC payments a hit in Europe...
Payments made using mobile devices are forecast to take off over the next three years, with an analyst's report predicting that global transactions will double in value to $50bn by 2014.
NFC mobile payments will have limited implementation to begin with, but are set to go mainstream once big-name supermarket brands adopt NFC technologyPhoto: Barclaycard/Orange
Smartphones and tablet PCs are increasingly being fitted with NFC technology, which enables users to make payments by touching the device on a reader.
NFC payments will become far more common in North America and Europe over the next three years, according to the report by analyst house Juniper Research, with the value of NFC-enabled transactions in these regions rising from next to nothing today to account for half the value of all NFC payments by 2014.
Major European telecoms operators have recently begun supporting NFC payments, with Deutsche Telekom, O2, Orange, Telefonica and Vodafone announcing NFC-enabled handsets or services.
Howard Wilcox, senior analyst at Juniper Research, told silicon.com that European operators are committed to supporting NFC services but that it "will take a number of years" before NFC mobile payment becomes mainstream in the UK.
He said this is partly due to the lack of NFC-enabled handsets available in the UK, with only one Samsung smartphone currently fitted with the technology.
Wilcox also said initial implementation of NFC readers is likely to be limited to fast-food-style outlets and coffee shops, but that once a big-name supermarket brand adopts the technology, others will soon follow.
Operators are now focusing on overcoming remaining obstacles to NFC services, Wilcox said, such as customer churn.
"They will want to make their service more attractive and more difficult for the likes of you and I to leave," he said.
The report also says adoption of NFC mobile payments could be hampered by poor word of mouth, if early adopters suffer issues such as shorter battery life.
Security is another issue that may stop consumers from using NFC technology, although David Snow, senior analyst at Juniper Research, said this is largely an issue of perception.
"Security issues are at the forefront of the consumer's minds, but the security mechanisms in there [NFC-enabled transactions] are as great as, if not greater than, all sorts of other financial transactions," Snow said.
Snow argues that once people begin using the technology to carry out low-cost transactions, consumer fears over security issues will ease.