According to the new research – Contactless Payments: NFC Handsets, Wearables & Payment Cards 2016-2020 the emergence of a range of connected wearables has piqued the interest of NFC stakeholders. It anticipated that devices such as watches and wristbands would be in the vanguard of these developments, although it cautioned that the sector would take several years to reach critical mass.
The research pointed out that while nearly 9 million Apple Watches had been shipped by the end of 2015, these numbers were dwarfed by NFC-capable iPhones. As a result, it said that wearables as a whole would not account for more than 2% of non-card contactless payments by value in 2018.
Furthermore, the research questioned the longer term prospects of wearable devices preloaded with credit, such as Barclaycards bPay range, arguing that such devices represented a greater security risk than those linked to credit or debit cards and protected by a secure element.
Apple Leads the Way, as MNOs Get Further Squeezed
Meanwhile, the research pointed to a sea change in the NFC ecosystem, with several vendors now following in the footsteps of Apple and embedding secure elements within the smartphone. It argued that this approach further weakened the contactless prospects for mobile network operators, which were effectively being cut out of the value chain.
Although Samsung is the only other OEM to date to launch an own-brand contactless payment service, Xiaomi has filed patents for such a service, while both ZTE and Lenovo have begun rolling out eSEs (embedded secure elements) in selected handsets.
According to research co-author Nitin Bhas, Most operator-led pilots and commercial ventures have now closed down. Apples entry into NFC gave the industry a much needed boost, and could well be seen as the tipping point for the technology, but at the same time it sounded the death knell for the mobile operator projects.
The whitepaper, NFC ~ No Contact Required is now available to download from the Juniper website together with further details of the full research.
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