Smart portable devices have been at the center of most development activities in near field communication market.
After a year and half since the announcement of Apple Pay, it is worth taking a look at net change executed. An individual survey released in November 2015 by Info Scout, tracked Apple Pay eligible transactions over a year. The resulting figure landed up being less than the approximated 5%. It is noticed that even with consumers being equipped with the device, the usage remained limited. The pre-installed near field communication device cost not a penny extra and payment did not include any extra efforts. Instead, the process was much simpler and time convenient. Despite major retail joints readily accepting NFC enabled mobile wallets, the physical absence of suitable check out points at the store is still an issue.
Current near field communication market
Both competitors, Apple Pay and Samsung Pay, are backed by NXP Semiconductors when it comes to near-field communication chips. The company now has its eye on the ever expanding consumer base for NFC enabled wearable devices. Sales figures for these devices crossed a $3 billion milestone in 2015 alone. In this backdrop, the news of Fitbit acquiring wearable payment technology assets from the startup Coin adds is another score for NFC industry. Coin, is another rising name in field of manufacturing NFC-enabled devices. Fitbit definitely intends to implement the technology in its upcoming gadgets, extending usability of their products. This could be seen in the light of recent tie-up between its direct rival Jawbone and American Express Co. Jawbone’s premium UP4 fitness band is already available in the market for contactless retail transactions.
Let us get back to the sluggish adoption rate of Apple Pay, among iPhone owners. There are no serious implications that market players must remain apprehensive of. In fact, the segment shall be directly benefitted with a population, diverted as a result of increased security barriers in card payments. It would be easier for people to simply walk through terminals, rather than insert cards and await data processing (no matter however fast it is!). Though, it is affirmative that mobile wallet developers extend their list of collaborations with retail giants. This means, convincing them to trust the technology enough to not just accept daily payments, but also invest in check-out terminal installations.
Near field communication: retailer’s approach
The most general query from the retailer’s end is very simple and kind of monosyllabic. ‘Why?’ the answer lies in the mutually beneficial scenario that they seem to miss initially. Smart devices, phones, tablets, and now wearables, are able to connect with online databases and social media platforms. Requisite consumer information is already stored in those. When a product is scanned by NFC-enabled device it gathers all details, right form price and discounts, to inventory batch and availability. There are chances of a product falling out of stock at some store due to one of many reasons. Store locator apps will then proceed to track down all possible locations with positive availability.
Once the customer acquires the desired item, he/she can update social media followers about his/her presence in the store. Moreover, if NFC tags at the terminals are properly configured with social media pages, retailers can effortlessly gain a new follower. Now, both the device and retailer, can suggest related buys based upon previous purchases. What is most important, is the fact that people spend more time buying stuff, rather than paying for it.
Prospects for near field communication market
With regard to such major trend-shifts occurring in consumer expectations, Allied Market Research has published a report on “World Near Field Communication (NFC) Market – Opportunities and Forecasts, 2014 – 2020.” Analysts have evaluated the industry at $3.2 billion in 2014, while predicting a CAGR of 40.4% during 2015 to 2020. This directly implies that the market shall reach $24.0 billion by 2020. As far as regional markets are concerned Asia-Pacific is expected to lead with the highest CAGR of 43.1% throughout the forecast period.