The view from within the electronics industry – individual comment pieces from people working in the technology sector.

NFC and mobile payments – always a bridesmaid never a bride

Is NFC finally going to make it into mainstream cellphones for mobile payments? Apple, using BLuetooth Low Energy – aka Bluetooth Smart may have other plans, notes David Manners. And it’s all part of the Great Game between Android and iOs…

NFC-friendly Android

NFC-friendly Android

Is NFC finally going to make it into mainstream cellphones? NFC has been a bit of a bridesmaid to the cellphone industry, hanging around hopefully without ever getting to the altar.

IHS reckons that 275 million phones were sold with NFC in them last year – that’s out of 1.5 billion phones shipped last year i.e. 18.2% of the total number of phones shipped had NFC in them.

In 2012 IHS says 120 million were sold, this year it expects that 416 million will be sold and, in 2018, it expects 1.2 billion to be sold when phones with NFC will represent 64% of the market.

So now, with Apple supposedly entering the world of mobile payments in the summer, NFC’s nuptials could be nigh.

Except that Apple may use low energy Bluetooth.

iOS7 supports BLE and so, for that matter, does PayPal’s mobile payment system.

The advantage of BLE over NFC is range – 50 metres compared to 30 cms – so reducing the number of Apple iBeacons or PayPal beacons used to cover a store.

So poor old NFC, after waiting for so long, may get jilted just as she prepares to sashay up the aisle.

Is Apple really going to do the mobile payments thing?

Well corporate pest, sorry activist investor, Carl Icahn, says: “We believe a revolutionary payments solution is now a very real opportunity that the company could choose to pursue.”

IHS NFC handsets

NFC handsets – Source: IHS

Now one thing which might make Apple keen to go down the mobile payments trail is the fact that nearly all the NFC-enabled phones sold last year – 93% of them – were Android, with 254 million NFC-enabled Android phones sold.

If Android – possibly using PayPal’s mobile payments system – were to go down the mobile payments route, then an Apple without a mobile payments system would be the one looking jilted.

And since both Apple and Samsung now have fingerprint technology in their phones allowing identification without the need for complex log-ins and passwords – mobile payment starts to look attractive.

So you could say the stage is being set for mobile payments. Certainly everyone expects it. The argument is more about implementation.

The most popular method of incorporating NFC into cellphones now is by embedding a standalone modem device directly into the handset. This method made up 90%, or 267 million, of all NFC modems that were shipped in handsets in 2013.

However, in the coming years, other implementations will become more popular, such as combination connectivity integrated circuits (ICs).

IHS forecasts that shipments of combination connectivity ICs will increase to 603.0 million units by 2018, or 50 percent of all modems, up from 17.2 million units in 2013. The introduction of combination connectivity ICs has been slower to market over the last 12 months than first projected.


One comment

  1. 275 million phones sold with NFC but how many of them have ever had the NFC used? And of this subset how many have been used for mobile payments and of that subset how many are used repeatedly for mobile payments.

    There is a Visa quote of “NFC – more pilots than the RAF”, the thing is the business case isn’t there and nor is the consumer demand. Like UMA and PTT it’s a technology which will die.

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