NFC could cover one-third of the globe by 2015

NFC is just in its infancy, but one of the potential powers behind mobile payments could be readily available many places in a few years.
Written by Rachel King, Contributor

Near field communications (NFC) has been a hot topic this year, particularly when it comes to mobile payments. NFC has the power to enable this feature on smartphones, and we're starting to see it trickle out on devices.

That trickle could turn into a waterfall by 2015 as market intelligence firm In-Stat reports that NFC chip shipments will rack up to 1.2 billion in four years, with the potential to be available around nearly a third (30 percent) of the globe in the same time frame.

While it's definitely possible, it is hard to see that dream becoming a reality at the moment considering there are so few options that support NFC. Google Wallet is getting the ball rolling on the Samsung Nexus S and the upcoming Galaxy Nexus, but obviously we need many more smartphones with NFC onboard to convince merchants on a global scale to invest in the technology.

During eBay's Innovate Developer Conference earlier this month, it was obvious that the online auction giant that has turned its focus to mobile commerce isn't going full throttle with NFC just yet, reflecting most other merchants online and offline right now. Most of PayPal's upcoming mobile solutions continue to focus on paying via mobile apps along with plastic cards and phone numbers.

Additionally, PayPal's senior director of Mobile Laura Chambers said during a panel discussion at GigaOM Mobilize 2011 in September that NFC is a “great technology,” but mobile payments is already happening really quickly. Thus, PayPal isn’t waiting around for three to five years for that medium to grow.

Nevertheless, In-Stat research director Allen Nogee argued just why we'll see more NFC in the coming years:

As the costs of NFC chips decline, and NFC radios are combined with other chip functions, the cost to integrate NFC into handsets will be outweighed by the benefits. The growth of combo chips will also allow NFC radios to piggyback on technology that already has significant penetration in the market. For example, Bluetooth radios, which currently have 100% market penetration, can be integrated with NFC radios, making the choice to include NFC easy for OEMs.

For now, In-Stat states that NFC makers are focusing more on marketing applications than payment applications for the time being. Yet, we should see retailers launching pilot programs later this year and more in 2012 that integrate "smart posters" into signage and outdoor advertising.


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