NFC most appealing payment method -- but not for a while
Against a background of delays in devices and infrastructure, Parks Associates believes NFC will play a major role in a mobile payments market worth $800 billion by 2015.
Mobile shopping will create this multibillion-dollar industry to be shared by credit-card companies, eCommerce retailers, and mobile operators, according to the Parks report.
According to Parks, NFC will become a standard feature of smartphones over the next few years. The firm’s report shows that almost 50% of U.S. smartphone owners find an NFC-enabled mobile wallet application appealing. The younger, Generation Y, group regularly use their mobile phones to research products or services prior to a purchase, providing a useful illustration of what the future holds.
That said, a supporting diagram strongly suggests that currently customers would like either to be billed on their monthly phone bill and that they are not comfortable with paying for services with their mobile phones.
According to Harry Wang, director, mobile research, Parks Associates, "the convenience of e-Wallet solutions, eliminating the need to carry multiple or any credit cards is driving the majority of consumer interest." Jennifer Kent, research analyst at Parks says the mobile payment space will become less fragmented over time. Consumers will gravitate towards a single, trusted provider for most of their mobile commerce needs and the development of a reliable wallet with diverse capabilities will be crucial.
There is a groundswell of activities in the mobile payment industry, according to Wang. Visa is engaged with payment solution providers, Google recently launched its Wallet app and Isis, a joint venture between AT&T, T-Mobile, and Verizon expanded its business model.
The report reflects the buzz around NFC but it is not a one horse race by any means, even though some countries are beginning large scale experiements. The barcode application developed by mFoundry for Starbucks and several carrier billing options will supplement consumers’ needs for specific types of goods and services for several years. The question is: while the world waits for ubiquity of NFC terminals, infrastructure and devices, (CP: With NFC phones still not here will it end up just one payment technology among many?) what else will lead the race and how embedded will that solution be.
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© 2014 Penton Media Inc.
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