Has NFC finally hit the sweet spot?

NFC technology may have finally reached the critical tipping point, with the standard expected to be available in over one billion smartphones, tablets, and other consumer electronics this year, according to Strategy Analytics.

1,000 percenters

This NFC proliferation is closely linked to the rapid growth of mobile payment services, use of which Deloitte predicts will increase by over 1,000 percent worldwide this year.

“We predict 2015 will be the first year that all mainstream mobile requirements will be addressed, making smartphone payment options easier, with user friendly security in place,” Deloitte Global’s Jolyon Barker, explains.

The proliferation of mobile payments means consumers are gaining confidence in the security of NFC transactions, particularly now the standard is supported by Apple and its Apple Pay service. “The service is helping to spark consumer demand for mobile payment technologies,” noted Andy Golub, 451 survey research director.

PayPal reports a 40 percent year-on-year growth in mobile payment transactions. “We did over 1 billion mobile payments transactions last year; we think that the world is moving increasingly towards mobile payments,” PayPal president Dan Schulman said.

PayPal’s vision isn’t confined to NFC payments, instead it hopes to support payments across multiple standards. That’s appropriate given the international differences. For example the GSMA recently revealed that the number of active users of Mobile Money has doubled from 2013 to reach 103 million, mostly in developing economies.

retail gets NFC

Deloitte anticipates 10 percent of the world’s smartphones will be used to make in-store payments at least once a month, compared to less than half a percent (led by early adopters in Japan) of about 450 million smartphones in mid-2014.

Retailers are turning to NFC as one pillar from which to support the evolving expectations of digital consumers. NFC is becoming an important component within such uses as mobile loyalty schemes or even in-store price comparison tools.

“In the medium term the impact of contactless mobile is wide: it provides the opportunity to deliver new customer experiences such as displaying special offers in store to NFC based devices, it may catalyze the removal of point of sales systems for merchants. And NFC may become incorporated into a wider range of devices beyond phones,” Deloitte informs.

NFC tags on products will in future provide consumers with personalized product information and coupons. Similar NFC deployments are being seen across other industries, particularly live events, museums and galleries.

With over a billion NFC-supporting mobile devices set to be in use by the end of the year, there are opportunities for technology deployment beyond payments.

beyond retail

The impact on ticketing and transport is a case in point. Over 50 percent of digital tickets will be bought using a mobile handset by 2019, Juniper Research claims, while in the UK Transport for London’s entire public transport network now supports NFC payments.

It also seems inevitable NFC will become more widely used within enterprise IT, as

smartphone users become more accustomed to using NFC to authenticate such processes as digitally signing documents or securely accessing the cloud. There’s other applications such as asset tracking: MapYourTag , for instance, is an NFC app that enables companies to track company assets and equipment, on a map.

Automobile manufacturers are also embracing NFC as part of their attempt to integrate smartphones and other mobile devices within the infrastructure for connected vehicles, with uses beyond that of being biometric ignition keys.

Consumer product designers are also embracing the standard. Musical T’s combine classic album cover art printed on t-shirts with an attached QR or NFC code that can be scanned to download the album to an NFC device. QuickLock is an NFC padlock that will open for your smartphone or other compatible device and Jawbone fitness trackers may soon gain NFC support. There’s even an NFC-capable business card.

As the technology matures and millions of NFC-equipped devices are in use, it is allow a broad exploration of NFC’s applications.  The NFC standards body, the NFC Forum, understands the critical part developers have to play in expanding use of the standard and offers the “Tap Into NFC” resource to help them.  “NFC developers are at the leading edge of the NFC ecosystem, opening our eyes to the growing number of things this remarkable technology can do,” said Paula Hunter, executive director of the NFC Forum.

Take a look at this infographic explaining how NFC can change our world and find out how Orange Business can help create customized M2M solutions for your industry, incorporating network, integration and applications.

Stewart Baines
Stewart Baines

I've been writing about technology for nearly 20 years, including editing industry magazines Connect and Communications International. In 2002 I co-founded Futurity Media with Anthony Plewes. My focus in Futurity Media is in emerging technologies, social media and future gazing. As a graduate of philosophy & science, I have studied futurology & foresight to the post-grad level.