Juniper Research (and many other research firms for that matter) is bullish on the prospects of NFC-based contactless payments. According to them, the NFC retail payments market will exceed $180 billion globally by 2017, which is more than a seven-fold increase over 2012. The leading regions of North America, Western Europe and Far East & China will contribute 90% of this market, with more than 1 in 4 mobile users in the US and Western Europe paying in-store using NFC.
The report found that 2011 was a watershed year for NFC payments: major technology infrastructure standards were finalized, many mobile network operators committed to the market and NFC payment pilots from both mobile operators and financial institutions transitioned to commercial service. Above all, NFC-enabled smartphone models were announced by almost all handset manufacturers and Google ignited the market by launching its wallet in the US.
The problem, however, are retailers, some of which are less convinced of the benefits of NFC payments over existing card technologies and are unwilling to invest in additional infrastructure so soon after the transition to CHIP&PIN. Education and “win-win” propositions from other ecosystem players are necessary to make retailers as committed to this opportunity as themselves.
Mobile operators on their end should also be interested to participate in this market, as it can provide them with a mean to offset declining ARPU…