Value Of NFC Mobile Payments To Pass $100bn Mark In 2016

Mobile payments utilising NFC (Near Field Communication) technology will have a total value of $4 billion this year, but in 2016 the figure will cross the $100 billion barrier and it will reach $191 billion in 2017.

This prediction comes from a report by ABI Research, whose publication bears the title "Mobile Payments, NFC, and Contactless Convergence". The company dwells extensively on market convergence, identifying the main beneficiaries and the obstacles before successful convergence.

According to ABI, the storage of proximity, P2P and online payment capabilities on a single NFC-enabled device will set off the convergence process across a number of other markets, among them ticketing, retail, loyalty and access control. Market convergence is not yet ripe enough for mass commercial roll-out but ABI believes it has identified the added value that NFC could bring. A successful outcome will deliver benefits to smart card and IC suppliers, original equipment manufacturers, mobile network operators, partnering service providers and payment networks.

Phil Sealy, research analyst at ABI, pointed out that it would be at least two more years before market convergence became a reality. In ABI's view, the first markets to reap the benefits will be transportation and ticketing. The company forecasts that 26% of all NFC-enabled mobile phones will feature a contactless ticketing application in 2017. This will make it possible for transport authorities to provide new added value services such as route planners, delay bulletins and timetables.

Before market convergence can be successfully achieved, a number of issues need to be dealt with, ABI practice director John Devlin said. One such issue is the development of clear business models, using real-world case studies to gauge potential returns.