The global value of mobile and wearable contactless payments is expected to reach USD95 billion annually by 2018, up from less than USD95 billion in 2015, according to a new study.
According to the new research from Juniper 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.
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.