Contactless card, infrastructure rollouts spurring mobile growth

Mobile wallet

A new report from Juniper Research has found that the number of consumers making contactless payments via their mobile handsets would reach 300 million globally by 2017, up from just over 110 million last year.

The report – Mobile Contactless Payments: NFC, iWallet & Host Card Emulation 2014-2018 – found that many markets were being seeded for mobile contactless adoption by accelerated rollout of contactless cards. These rollouts were being accompanied by marked increases in contactless POS (Point of Sale) terminals, with leading vendors VeriFone and Ingenico both now shipping the majority of their terminals with NFC (Near Field Communications) as standard.

Need to Educate the Market

However, the report cautioned that stakeholders needed to step up efforts to raise consumer awareness about mobile contactless payments and to educate retailers about the contactless value proposition. According to report author Dr Windsor Holden, “Contactless is largely being sold to retailers on the basis of faster throughput at the POS. The other critical opportunities offered by contactless – such as consumer engagement and product upselling – are much lower on their radar.”

Meanwhile, the report argued that the lack of a coherent business model had constrained NFC rollouts, with the cost to deploy a mobile payment card more than to issue a plastic card. Furthermore, while it claimed that the anticipated launch of an Apple iWallet would create a positive “halo effect” for the wider contactless space, it was unclear at present whether additional POS upgrades would be required.

Other findings from the report include:

  • HCE (Host Card Emulation) is enabling the provision of a remote SE (Secure Element), potentially reducing time-to-market and meaning that banks can retain control of their customers without needing to partner with mobile network operators.
  • NFC stakeholders need to absorb the cost of interim solutions and offer NFC stickers without charge to the end user.

The whitepaper, Tapping into Contactless Payments, is available to download from the Juniper website together with further details of the full report and the attendant Interactive Forecast Excel (IFxl).

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