News & Views - Savantor

NFC may not always be the next great thing

Wednesday, 31 July 2013

Rumours abound that the next iteration of the iPhone will contain support for NFC.  If true it could be a major step forward for mobile payment technology.  NFC supporters have claimed for years that an Apple entry into the market would herald the era of NFC.  The belief was that Apple was the only phone vendor with enough market share and influence on retailers to actually make NFC happen.  With 435 million iTunes accounts worldwide, each with a funding mechanism of some sort, there was some truth in this.

An industry survey conducted by Copperberg on the status of NFC technology, focused on mass adoption and the key reasons why the technology has not really taken off yet.  Respondents, from Mobile Network Operators, Banks and Retailers to Trusted Service Managers, Handset and RFID Manufacturers took part.  The survey found that 65% of the respondents agreed, that in order to get true mass adoption, NFC should focus on educating the masses about non-payment opportunities, and that once this is accomplished, payment will follow.

When asked what they feel is preventing mass adoption of NFC, respondents answered with a "complicated business model" – a large ecosystem with so many players involved hinders the development and implementation of the technology. Also, "a lack of support from Apple," referring to the fact that a large portion of smart phone market share is not currently NFC-enabled.  Additional findings from the survey revealed that NFC as a technology is most interesting for Transport & Ticketing (39.8%), followed by Retail (25%), Payments & Wallets (19.3%), and then Access Control & Authentication (15.9%).

With over 500 million NFC devices expected by next year (according to ABI), and NFC now included in the most popular smartphones outside of IOS devices, non-payment NFC use already include authentication, ticketing, media downloads, file/data transfer, social gaming, vending, health ID cards, and many others. So although there are a number of NFC-based payment solutions on the market nothing significant has really happened but if the rumours become reality then after years of being the next great thing it might finally happen.



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