The number of consumers making contactless payments on their phones will hit 148m this year, driven by adoption of Apple and Samsung’s mobile wallets. That’s according to a new report from Juniper at least, which predicts that between the pair of them the companies will account for nearly 70 per cent of new customers using NFC for the first time this year. The firms have ruled a duopoly in the handset space for a number of years now so in some ways it’s no surprise that their mobile wallets are dominating the space.
Juniper points to the influence of their brands in onboarding consumers to mobile payments, with Apple Pay launching in China, though not without its problems, triggering 40m payments cards to be registered on the service in the space of 24 hours.
Of course, for meaningful adoption to happen customers also need to be able to actually use NFC on the ground – in shops, restaurants and bars. While contactless spending is booming in markets like the UK due to heavy investment in the country’s contactless acceptance infrastructure, that’s not the case in the US.
That’s set to change however with Juniper forecasting that this year, nearly one in five point of sale terminals in the US will be contactless – meaning that the hardware is in place for contactless to experience traction. It will be phones, not cards driving adoption initially due to the comparatively limited number of contactless cards available in the region.
HCE, Banks & Stickers
Interestingly, the report predicts that banks will “widely deploy” solutions based on host card emulation (HCE) technology. In this case, sensitive data is secured in the cloud, rather than the device and is already being used by more than 50 financial institutions including Barclays by Juniper’s reckoning.
“The combination of HCE and tokenisation is extremely attractive to banks,” says Juniper analyst Windsor Holden.” HCE means that they are not dependent on a mobile operator to enable the service; tokenisation reduces the burden on the issuer and allows them to use their existing infrastructure.”
Meanwhile the research is less optimistic about the NFC sticker solution that was conceived to patch the interim time before NFC capability was baked into a device due to security concerns.
In this guest post, Anthony Walton, CEO of Iliad Solutions, explores how businesses and regulators can increase the safety and efficiency of transactions, and introduce technological advances into the system.
Payment terminals have stayed the same over the last 10 years, with steady advances in contactless and mobile wallet transactions. Retailers and brands are making a conscious effort to get closer to consumers.