Study: NFC-enabled mobile payments to total $130 billion by 2020

BOSTON - Payments made via near field communications (NFC)-enabled mobile handsets will account for $130 billion in worldwide consumer retail spend by 2020, according to a study by Strategy Analytics. This equates to 254 million mobile users making five payments per month at an average of just below $9 per transaction.



The report "Global Mobile NFC Payments to Exceed $130 Billion by 2020," quantifies the scale of the NFC-based mobile payment opportunity and identifies the launch of Apple Pay initiatives by payment networks to drive contactless payment acceptance among retailers, and consumer demand for mobile payments, as three key catalysts for growth.



To date, retailers have been slow to support NFC payments in-stores. However, Strategy Analytics believes the launch of Apple Pay in October 2014 combined with a push by payment network will stimulate the adoption of NFC-enabled point-of-sale (POS) terminals by retailers.



"The launch of Apple Pay is significant because it means all major smartphone vendors support NFC-based mobile payments, but it also provides a credibility boost for the NFC payments sector as a whole,” said Nitesh Patel, director, Wireless Media Strategies. “Furthermore, continued efforts by payment networks, for example MasterCard has set a target of all MasterCard payment points supporting NFC in Europe by 2020, will be crucial in stimulating its use and adoption."



Despite Strategy Analytics' positive outlook for NFC-based mobile payments, it will account for a single digit share of the multi-trillion dollar retail market globally by 2020, as traditional forms of payment (e.g. cash and cards) remain dominant, noted David MacQueen, executive director, media and apps.



“We don't expect consumers to begin to leave their wallets behind until NFC POS becomes ubiquitous towards the end of the forecast period,” he said. “In order for NFC-payment to gain strong traction, Strategy Analytics believes NFC-payments must add greater convenience for consumers, such as merging payments, loyalty point accumulation and coupon redemption into a single tap, while providing a platform for retailers to drive sales via targeted marketing or cutting costs."