According to a new report from Strategy Analytics research company, more than 100 million people globally will use an NFC handset to make a purchase this year and the value of transactions conducted via NFC handsets will grow from USD 30 bn in 2016 to USD 45 bn in 2017, USD 70 bn in 2018, USD 110 bn in 2019, USD 160 bn in 2020 and reaching USD 240 bn in 2021.
The reason for the growth, the analysts say, is the increasing competition between mobile wallets from device vendors Apple and Samsung, payment card issuers, and mobile operators, combined with a maturing contactless payment infrastructure across most regions. Furthermore, Strategy Analytics expects consumer readiness to adopt mobile payments to improve as providers of mobile wallets increasingly support coupons and loyalty cards.
What contributed to the growth is the rising use of contactless payments over the past 12 months, particularly in cities like London where the acceptance of contactless payments has become nearly ubiquitous.
Moreover, the report explains that handset-based contactless payment needs to go beyond the convenience offered when paying by contactless cards and combine loyalty and offers into mobile payment applications to provide an incentive for users to switch to mobile wallets.
The downside is that user research points towards security concerns as a key barrier to mobile payment adoption, thus, making it clear that mobile wallet providers must continue to educate consumers about the additional security provided by biometric authentication and tokenization.
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