Mobile payment spend using NFC to hit the $100 billion mark in 2016
The total value spend of NFC mobile payments will rise from $4 billion in 2012 to $191 billion in 2017, breaking the $100 billion mark in 2016, ABI Research forecasts.
Mobile payments and more importantly the convergence between payment types – proximity, P2P and online – stored on a single NFC handset will be the initial trigger driving market convergence across a host of other markets, including ticketing, retail, loyalty, and access control, the research firm stated.
Market convergence is not quite ready for mass commercial roll out, but the potential value add that NFC brings has been identified. Smart card and IC vendors, device OEMs, mobile network operators, partnering service providers, and payments networks are all set to benefit should convergence prove successful, said ABI.
Research analyst at ABI Research, Phil Sealy, said: 'Market convergence is at least two years away from reality. We believe transportation and ticketing will be the first market to benefit from convergence, with 26% of all NFC handsets forecast to house a contactless ticketing application in 2017.
'Transport authorities will have the ability to offer additional added value services, including route planners, delay bulletins, timetables, as well as retail and loyalty, or advertising applications offering own-brand or partnering with local business as a platform to offer additional solutions to generate new revenue streams.'
Practice director, John Devlin, added: '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. Current network operator pricing strategies makes market entrance and investment difficult for potential partners. This is demonstrated by mobile operators holding back from large scale investment in NFC smartphones.
'Also Telefonica O2's mobile wallet and Barclays PingIt have not included NFC functionality at launch. Although NFC is in their roadmaps, initial convergence is based upon the use of other technologies,' he noted.