More than 148 million people will be making contactless payments via their smartphones this year, Juniper Research claims.
In its report, entitled Contactless Payments: NFC Handsets, Wearables & Payment Cards 2016 – 2020, the company says Samsung and Apple will grab the biggest piece of the pie, accounting for almost 70 per cent of new customers.
This is mostly because of their strategic placement – they’re already present in key markets, China being of high importance. The report says nearly 40 million payment cards were registered to Apple Pay in 24 hours in mid-February.
Another strong point why contactless payment via mobile will see a dramatic increase is that nearly 1 in 5 point of sale terminals in the US are now contactless-capable, so the infrastructure necessary to make things work is in place. Smartphones will be the number one driver in the US.
Banks and ‘leading OTT players’ will deploy Host Card Emulation-based models, the report also says.
According to research co-author Dr Windsor Holden, “The combination of HCE and tokenisation is extremely attractive to banks. 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.”
NFC stickers-based solutions are not something the research would suggest though, as there are multiple security risks. The report says that even in closed-loop solutions, thieves could simply spend all the money in the wallet at participating retail outlets. The full report, ‘NFC-No Contact Required’ is available to download from the Juniper website here.