As near field communications becomes standard, the NFC retail payments market is expected to exceed $180 billion globally by 2017, more than a seven-fold increase over 2012, according to a new report from Juniper Research.
The forecast growth will be boosted by North America, Western Europe, the Far East and China. Together these regions will constitute 90% of the market value as smartphones with NFC payment technology become standard.
As noted in the report, one in four mobile users in the United States and Western Europe will make in-store payments using NFC by 2017.
There are about 30 NFC handsets on the global market. The Juniper Research report found that 2011 was a watershed year for NFC payments as major technology infrastructure standards were finalized.
The challenge ahead is about ecosystem readiness. Are service providers, consumers, merchants and handset manufacturers ready to adopt NFC payment? Their readiness is interrelated: If users are prepared, they will adopt the new technology, and merchants will expand their contactless infrastructure. On the other hand, retailers are less convinced of the benefits of NFC payment over existing card technologies and are unwilling to invest in contactless infrastructure so soon after the transition to CHIP&PIN.
Education and “win-win” propositions from other ecosystem players are necessary to make retailers committed to this opportunity.
“This is a critical time for the NFC retail payments market, and despite the significant progress being made today, the full potential of the market can only be fulfilled if all ecosystem players are equally committed and mobile wallet consortia remain in place,” said the report co-author, Dr. Windsor Holden.
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