Apple’s NFC-powered payment system, Apple Pay, will let users of iPhone or Apple Watch to pay in thousands of stores accepting contactless payments. NFC Payments have been around a while, but Apple Pay has the potential to make widespread adoption of digital wallet payments a reality at last.
NFC technology implementation driven by mobile payments solution requires NFC enabled equipments at both consumers and retailers end. There seems to be continued theme of moving payments process from Cash to Cashless (Cards) to Contactless technology over the last decade. This theme has been the primary driver for contact less technologies such as NFC, BLE and Bar codes. At consumer end, requirement manifests introduction of NFC chipsets in consumer devices such as Mobile phones (especially smart phones), Tablets and others.
Currently, almost all major device manufacturers, including Apple have begun to put NFC chipsets in their major models. Mobile payments may have gone from a nice-to-have to a must-have today, thanks to Apple’s announcement of its Apple Pay platform. NFC payments aren’t new, and have existed in the Android ecosystem for several years. The question is how will Apple change the NFC landscape? Apple has an enormous installed base, many of which will eventually upgrade to NFC and Apple Pay enabled devices.
How will merchants react? Will liability shift become a boon for the NFC industry? NFC POS terminals are costly and their high cost has been the primary reason for low adoption among merchants. Merchants have to update their payment hardware due to Liability Shift by next year. Although Liability Shift is more related to EMV adoption, Apple pay will push a lot of retailers to upgrade their POS systems which will also support NFC. This will result in strong growth of NFC POS worldwide.
- Global NFC smart phone shipment forecast: Global NFC enabled smart phone shipments are expected to grow from XX8 million to 1,564 million handsets in 2019. This is driven by positive outlook for NFC technology. Moreover Apple will have a domino effect on other smart phone manufacturers; most of them will try to include NFC feature in their smart phones.
- Global NFC POS installed base forecast: Global NFC POS installed base is expected to grow from XX million in 2014 to 221 million by 2019. Growth is expected to be driven by increased adoption in Americas and Asia-Oceania. The share of NFC enabled POS installed base as a % of total POS installed base, is expected to be 66% in 2019.
- Global NFC Payments Volume: Global NFC payments volume is expected to grow from XX Billion in 2014 to 683 Billion by 2019. The NFC payments volume will be driven by strong demand in US after the launch of Apple Pay and China.