NFC Payments: Tapping the Future

NEW YORK, July 12, 2011 /PRNewswire/ -- Reportlinker.com announces that a new market research report is available in its catalogue:

NFC Payments: Tapping the Future

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Introduction

NFC Payments Tapping the Future provides an overview of the current state of the global Near Fields Communications payments sector. This includes detailed customer segmentation of likely adopters of NFC, an assessment of some of the key opportunities and threats facing the future of this new payments technology, and key takeaways for issuers who want to harness the potential of NFC.

Features and benefits

Understand what NFC can mean for your business by learning about how it works and its potential applications.

Plan your strategy effectively by learning about key target demographics and who NFC is most likely to appeal to.

Cut through the hype and assess what the latest developments from major players means for your company in the short, medium and long term.

Build your business case by understanding the key hurdles and obstacles that stand in the way of full NFC implementation.

Highlights

The global Near Field Communications market is finally seeing significant commercial launches of hardware and services after years of trials and speculation. However even with significant players such as Google, Apple, Nokia, Orange, and others becoming involved, these launches are more of an evolutionary step than a revolution.

According to Datamonitor's NFC Adoption model only 1.8% of consumers globally are likely to immediately adopt NFC payments once it is released. However a further 12.2% and 31.7% show a medium to low likelihood of immediate of adoption. This suggests that with the right incentives and marketing, the longer term opportunity remains significant.

NFC must overcome significant barriers with issuers, consumers and merchants. In the case of issuers and merchants the business case remains unclear, and investment in services or acceptance hardware will remain subdued as a result. Consumers will require incentives to shift them from existing payment tools.

Your key questions answered

What is the business case for NFC and mobile contactless? How do players involved plan on making money?

What is happening now in NFC? Is it really a revolution in payments?

Who is launching NFC services? What do their models and strategies mean for the payments industry?

Who is likely to be interested in NFC? is NFC suitable for all consumers?

What impact will the hardware have on the NFC market? Is the technology ready?

Executive Summary

An NFC ecosystem is finally emerging

Introduction

Five key findings for the payments industry

NFC is only one of several forms of mobile payment

The NFC ecosystem is being shaped by hardware and services launches from major players

Mobile wallets are emerging as a key battleground in NFC payments

Understanding the NFC consumer

Datamonitor's NFC Adoption Model sizes the target market for NFC

Early adopters of NFC will come from the banked and older age groupings

The initial opportunity in NFC payments lies in meeting the needs of highly likely adopters

The three key obstacles that NFC must overcome

The business case for issuers is weak

The consumer proposition needs to be strengthened

Merchants are skeptical and this is limiting growth in contactless acceptance

OVERVIEW

Catalyst

Summary

AN NFC ECOSYSTEM IS FINALLY EMERGING

Introduction

This report is an objective analysis of the opportunities for NFC in mid-2011

NFC is only one of several forms of mobile payment

NFC sits alongside P2P and m-commerce as a key form of mobile payment

NFC standards are still evolving but the NFC Forum is playing a leading role

NFC technology can be used for more than just payments

The NFC ecosystem is being shaped by hardware and services launches from major players

Commercially available NFC handsets are now in the market

NFC's growth will be driven by the wider use of smartphones, but will take time to reach critical mass

Smartphones are growing as a share of the market

All of the major handset manufacturers have announced NFC models

While the availability of handsets is expanding, developers are still working out what to do with NFC

An NFC version of popular game Angry Birds will act as a showcase for the technology to Nokia customers

Google is opening up some modes to app developers, but not card emulation

Couponing is emerging as a major driver of future NFC use

Mobile wallets are emerging as a key battleground in NFC payments

Mobile operators have made the first moves in developing mobile wallets

UNDERSTANDING THE NFC CONSUMER

Datamonitor's NFC Adoption Model sizes the target market for NFC

The NFC Adoption Model identifies three target consumer groupings for NFC based on current behavior

Early adopters of NFC will come from the banked, and older age groupings

Less than 2% of consumers are highly likely to adopt NFC payments immediately

The number of consumers with a high likelihood of adoption is limited in all countries

The initial opportunity in NFC payments lies in meeting the needs of highly likely adopters

Highly likely NFC adopters are over the age of 25

Likely NFC adopters hold secure employment and make more money

THE THREE KEY OBSTACLES THAT NFC MUST OVERCOME

Introduction

The business case for card issuers is weak

The secure element remains up for grabs and is central to the future NFC business model

This complexity has also led to a growing role for third-party trusted service managers

The business case is mainly focused outside of both merchants and issuers

The consumer proposition needs to be strengthened

NFC will need to be easier, cheaper, faster, and more convenient than existing payment tools

Mobile wallets are the likely driver of NFC convenience

The consumer proposition will need to include incentives

Consumer interest in NFC has not been proven in trials

Japanese uptake of NFC has been weak, and the market is now driving growth through incentives

Many merchants are skeptical and this is limiting growth in contactless acceptance

Most consumers are still not using contactless

Contactless acceptance infrastructure growth is restricted by hardware lifecycles and merchant concerns on interchange

APPENDIX

Additional data

Near field communication (NFC) adoption by country

NFC adoption by demographic status

Consumer use and attitudes to contactless cards

Definitions

Credit card

Debit card

European Payments Council (EPC)

ePurse/eWallet

Interchange

Merchant service charge (MSC)

Mobile network operator (MNO)

Mobile payments

Person-to-person (P2P) payments

Point-of-sale (POS) terminal

Prepaid card

Stored value card

Trusted service manager (TSM)

Methodology

Further reading

Selected bibliography

Ask the analyst

Datamonitor consulting

Disclaimer

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Mobile Telephony Industry: NFC Payments: Tapping the Future

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Nicolas Bombourg

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