Near Field Communication is being touted as the future of contactless payments. Indeed, considering the pace at which innovation and adoption is growing, especially in the smartphone and tablet industry, it won’t be far-fetched to say that this technology will witness massive adoption in the near future. With an estimated 400 million NFC devices already present in the market, NFC technology, though at a nascent stage, is expected to gain traction in the near future.
One of the key factors driving the adoption of NFC in mobile phones and tablets is the behemoth mobile payments market. Valued at US$ 549 billion in 2015, the global mobile payments market is expected to be worth US$ 2,849 billion by 2020, of which NFC transactions are expected to be 8.3%.
Use of NFC for contactless payments is expected to single-handedly drive the global market in the near future. As mobile manufacturers look to increase the functionality of their offerings, NFC is expected to gain traction. Retailers, chip makers, and consumer good companies stand to benefit from the adoption of NFC in the near future.
Security Breaches Remain a Concern
Although the future of NFC looks bright and overly positive, concerns around security breaches can impede adoption. According to an ISACA global survey, only 23% respondents believed that mobile payments are secure, whereas a staggering 87% expected more mobile payment breaches in the next one year. Service providers will need to address the loopholes in their offerings if NFC has to become an all-pervasive technology in the future.
North America Leads the Way in Adoption of NFC Technology
North America is the largest NFC market currently, with the US leading, both in terms of innovation and annual revenues. A number of key players in the global NFC market are based in the US, providing an impetus to the market in the region.
Western Europe and Asia Pacific are the other key markets where NFC is witnessing strong adoption. Growth is especially strong in Asia Pacific, where adoption in China and India is creating a plethora of opportunities.
In addition to contactless payments, the he global NFC market can be broadly categorised on the basis of application into,
- Contactless payments
- Data sharing
- Access control and authentication
- Medical and healthcare
On the basis of product type incorporated in the NFC system, the global market can be segmented into auxiliary (SIM cards, micros SD cards, and NFC-enabled covers) and non-auxiliary (tags, readers, controller IC’s/chips). Among these, demand is expected to be strongest for NFC readers on account of their application in authentication and access-control.
The key players in the global NFC market include, Broadcom Inc., Samsung Electronics Co. Ltd., Visa Inc., Gemalto N.V., Device Fidelity, Identive Group, Inc, STMicroelectronicsToshiba Corporation, NXP Semiconductors, Infineon Technologies and On Track Innovations (OTI) Ltd. etc.
The information presented in this article is based on FMI’s report, “NFC Market: Global Industry Analysis and Opportunity Assessment 2015-2025.” You can request a free sample or table of contents of the report at http://www.futuremarketinsights.com/reports/sample/rep-gb-464
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