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| Monday, 09 July 2007 | |
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Near Field Communications technology to play major role in future US$22bn mPayments market…
According to a new analysis from Juniper Research, mobile payments (mPayments) will account for US$22bn worth of transactions by 2011, and a key enabling technology will be Near field Communications (NFC). In its study ‘Mobile Payment Strategies & Markets 2007-2011’ Juniper says that this level of mPayment activity will be driven by the commercialisation in 2009 of NFC and the growth of P2P fund transfers and mobile payments in the developing world. Juniper reckons that greater availability of NFC devices, for physical mobile payments, coupled with secure and easy-to-use applications, backed by the large credit card organisations and financial institutions, will create the foundation for a healthy alternative to cash and other mainstream payment applications. “The technology is available now to enable secure and fast payments to be initiated on the mobile phone. The business model stills needs some work but there are positive signals emanating from the industry that will create considerable revenue for all parts of the ecosystem” ventures report author Alan Goode. “I am cautiously optimistic for the future success of mPayments.” Goode does allow, though, that there is still much to do, and that resolving the business model and the revenue share issues are a priority. ABI Research agrees that the NFC/MPayments deal is not yet a done one. In its ‘Near Field Communications (NFC): Leveraging Contactless for Mobile Payments, Content and Access’ published earlier this year ABI Research forecast that, by 2012, some 292mn handsets - just over 20% of the global mobile handset market - will ship with built-in NFC capabilities. The company also believes that this year will be critical for NFC technology as key standards and operator trials complete the foundations for the first real deployments. “NFC in mobile phones promises a quicker and easier way to execute a host of key tasks by just waving the phone,” observes senior analyst Jonathan Collins. “Making payments, unlocking doors, downloading content, even setting up wireless networks and many other applications, can all be enabled from an NFC handset.” But early enthusiasm for NFC adoption in handsets - fuelled by its functionality and flexibility - has been tempered by the complexity of the ecosystem required to support multiple, revenue-generating NFC applications. ABI Research believes that NFC will not become widely available in the handset market until wireless operators are confident they will see a clear return from specifying NFC in their latest products. “As the dominant mobile handset purchasers in the world, mobile operators stand as the gatekeepers of NFC's entry into new handsets,” notes Collins, “and until they are comfortable with getting a return on the investment in those handsets, NFC will not reach a mass market.” ABI argues that, while the simplicity of NFC use reflects its lineage in already-deployed contactless payment, ticketing and access control technologies, the multiple applications that NFC facilitates bring a host of complexities and interoperability issues when it comes to creating the business relationships required to enable and manage NFC applications on each handset. The research company concludes that success in developing NFC relationships, primarily between card issuers, contactless transportation ticketing providers and mobile operators, will determine the speed and shape of deployment and consumer availability of NFC in handsets. John Williamson |
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