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IREU Top500 The Customer Report: 2018

IREU Top500 The Customer Report: 2018

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Mobile NFC Scaled Back

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Juniper Research has published its revised forecasts for the global NFC market, significantly scaling back its growth estimates for the North American and Western European markets. While its report finds that by 2017 the proportion of NFC-enabled smartphones will be only marginally below previous estimates, global NFC retail transaction values are now expected to reach $110bn in 2017, significantly below the $180bn previously forecast.

According to the report, Apple’s decision to omit an NFC chipset from the iPhone 5 has reduced retailer and brand confidence in the technology, leading to reduced POS (Point of Sale) rollouts and less NFC campaigns. This in turn will lead to lower NFC visibility amongst consumers and fewer opportunities to make payments, threatening a cycle of “NFC indifference” in the short term.

“While many vendors have introduced NFCenabled smartphones, Apple’s decision is a significant blow for the technology, particularly given its previous successes in educating the wider public about new mobile services,” says report author Dr Windsor Holden. “Without their support, it will be even more difficult to persuade consumers – and retailers – to embrace what amounts to a wholly new means of payment.”

The report found that Apple’s move would impact most dramatically on markets in North America and Western Europe, where transaction values would exhibit a “two year lag” on previous forecasts as retailers delay POS investments.

Conversely, retail transactions in NFC’s heartland in Japan and Korea are likely to experience little or no impact from the decision. It also observed that lower than expected adoption of Google Wallet allied to a delayed launch of the ISIS NFC project in the US would also have a negative effect on that market.

On a brighter note, the report also says that despite Apple’s decision, NFC trial consumer feedback – such as at the London Olympic venues and in Singapore – has been extremely positive, suggesting strong latent interest when services are more widely deployed. Both MasterCard and Visa have certified several NFC service solutions and datacentres, including those of Giesecke & Devrient and Gemalto.
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