As we heard last week, Isis, the carrier-led joint venture between AT&T, T-Mobile and Verizon, is picking up steam in the NFC world to make these payments a reality. And we know Google has made a big bet on NFC as a payments technology. But it’s still unclear whether NFC (near field communication), which allows devices to exchange data over short distances with a wave or a tap, will become a major force. But Juniper seems optimistic that NFC payments will become a huge market in the payments world forecasting that global NFC mobile contactless payment transactions will reach nearly $74 billion worldwide by 2015.
Juniper contends that NFC is increasingly being used for the payment of goods in-store and as transport tickets; and is already over triple the expectation for 2011. Additionally, the firm says that the use of mobile devices as an alternative to credit cards and paper tickets is one of the fastest growing segments of the mobile commerce market.
Juniper’s David Snow explained in the report “Our report demonstrates the spectacular growth we see across all segments of the mobile commerce market. Four of these segments (money transfer, physical goods, NFC and coupons) will more than triple in transaction value over the next three years, whilst digital goods, banking and tickets will still on average, double over the same period.”
The barrier to mobile payments and NFC, says Juniper, are both real and perceived security risks. Even if one application is found to be insecure, this could throw off the whole market.
Other findings include that SMS is the key to widespread mobile banking service adoption and without interoperability mobile money transfer services will have difficulty gaining a critical mass of users. And while mobile coupons still represent the smallest mobile commerce segment, it is demonstrating the highest growth rate.
Last year, Juniper forecasted that North America and Western Europe together will exceed the Far East region in under three years based on transaction value. And North America and Western Europe will account for 50% of NFC payments market by value in 2014.
Slowly but surely, more companies are incorporating NFC into payments solutions, but there are still questions as to whether NFC will become a dominant technology in the mobile payments landscape of the future, especially when other companies including PayPal, Square and others seem to be shying away from making a big bet on the technology. The other missing component is Apple’s participation in the space, and it’s still unclear if the iPhone maker will be adopting the technology.