A number of industry watchers have voiced concerns that touchless mobile payment solutions will not truly find widespread adoption until Apple (AAPL) joins the fray and adds the functionality to its popular iPhone line of smartphones. While Apple has yet to give any indication that its smartphones will support NFC-based mobile payments in the future, one firm is confident that the market will soon take off like a rocket.
In a report issued on Friday, market research firm ABI Research predicted that dollars spent using NFC mobile payment systems will break the $100 billion mark in 2016. Payments made using the touchless technology payment tech will total just $4 billion in 2012 according to the firm, but will balloon to $191 billion annually in 2017.
“Market convergence is at least two years away from reality,” ABI analyst Phil Sealy said in a statement. ”At ABI Research, we believe transportation and ticketing will be the first market to benefit from convergence, with 26% of all NFC handsets forecast to house a contactless ticketing application in 2017. Transport authorities will have the ability to offer additional added value services, including route planners, delay bulletins, time tables, as well as retail and loyalty, or advertising applications offering own brand or partnering/local business a platform to offer additional solutions to generate new revenue streams.”
Sealy’s colleague John Devlin acknowledged that there are some significant barriers to adoption right now, but he remains optimistic.
“The business models have not yet been clearly identified and proven with no real-world case studies to demonstrate the potential returns,” Devlin said. “Current MNO pricing strategies makes market entrance and investment difficult for potential partners. This is demonstrated by MNOs holding back from large-scale investment in NFC smartphones. Also Telefonica O2’s mobile wallet and Barclays PingIt have not included NFC functionality at launch. Although NFC is in their roadmaps, initial convergence is based upon the use of other technologies.”
In the United States, Google’s (GOOG) Google Wallet remains the most widespread NFC mobile payment solution but it has not yet found success. Isis, an NFC-based mobile payment system backed by Verizon (VZ), AT&T (T), T-Mobile and other large companies, is set to launch in the coming months.