Near Field Communications (NFC) mobile payments are expected to account for $130bn in consumer retail spend by 2020, reveals a new Strategy Analytics report.
The report estimates that 254 million mobile users will be making five payments per month at an average of less than $9 per transaction.
The report "Global Mobile NFC Payments to Exceed $130 Billion by 2020," noted that the key factors responsible for the growth include the launch of Apple Pay, initiatives by payment networks to fuel contactless payment acceptance among retailers, and escalating consumer demand for mobile payment.
Strategy Analytics Wireless Media Strategies (WMS) director Nitesh Patel said: "The launch of Apple Pay is significant because it means all major smartphone vendors support NFC-based mobile payments, but it also provides a credibility boost for the NFC payments sector as a whole."
"Furthermore, continued efforts by payment networks, for example MasterCard has set a target of all MasterCard payment points supporting NFC in Europe by 2020, will be crucial in stimulating its use and adoption."
The report added that extensive acceptance of NFC and contactless payments by retailers will turn out to be essential for the consumers’ adoption and usage of NFC-based payments.
However, the launch of Apple Pay alongside a push by payment networks will fuel the retailers’ adoption of NFC-enabled point-of-sale (POS) terminals.
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Strategy Analytics Media and Apps executive director David MacQueen said: "Despite Strategy Analytics’ positive outlook for NFC-based mobile payments it will account for a single digit share of the multi-Trillion dollar retail market globally by 2020, as traditional forms of payment (e.g. cash and cards) remain dominant."
"We don’t expect consumers to begin to leave their wallets behind until NFC POS becomes ubiquitous towards the end of the forecast period. Even in countries like Japan and Korea, where contactless payment initiatives have been established for longer, mobile payment co-exists with cards and cash.
"In order for NFC-payment to gain strong traction Strategy Analytics believes NFC-payments must add greater convenience for consumers, such as merging payments, loyalty point accumulation and coupon redemption into a single tap, while providing a platform for retailers to drive sales via targeted marketing or cutting costs."
