NFC Payments to be worth $100 billion in 2016 says ABI Research

NFC Payments to be worth $100 billion in 2016 says ABI Research, MNOs could lose out if they don’t partner

ABI research has released its latest “NFC Mobile Payments” report that suggests mobile network operators may lose their part in the $100 billion opportunity that NFC payments will represent by 2016. What we like about this report in particular is that ABI Research recognizes that analysis from other analyst companies resign NFC payments to a hype-driven phenomenon. The research firm holds form and still predicts that NFC payments will soon become not only a reality, but also a mass market-adopted behavior in the United States and Western Europe in 2016.

“Despite the lack of definitive announcements to date, MNOs and OEMs will flood some markets with NFC payment-ready smartphones in 2012 and 2013. That, along with momentum from Google Wallet and several other MNO-led initiatives, like Cityzi in France, ISIS in the US, and the yet unnamed MNO JV in the UK, builds the installed base of NFC mobile payment users to more than 16% of mobile subscribers in the U.S. and Western Europe by late 2014,” says Mark Beccue, Senior Analyst of Mobile Money.

Just a few months ago most reports speculated that NFC phones would be slow to market and NFC payment adoption would lag. ABI Research bucks that trend and suggests that there will be a multitude of NFC phones hitting the market starting this next year and that NFC payments will quickly become ubiquitous in developed markets. The firm also speculates that there will be multiple choices of NFC mobile wallets for NFC payments, however, this may not be the case in the States if Isis stays on its current course and attempts to control NFC payments. ABI Research’s report warns against the power grab mentality for MNOs, and it will be interesting to see how relationships between rival MNOs hold up when NFC payments are in full swing.

ABI Research projects that the total dollars spent worldwide using NFC payments will surpass $100 billion in 2016, which it declares is a relatively small amount compared to the tens of trillions of overall annual consumer spending. “$100 billion is a healthy amount for an emerging payment initiative,” says Beccue, “especially when you consider it will have existed for less than four years in 2016.” $100 billion is a lot of transactions and yet ABI Research is correct in their statement that it represents a drop in the ocean of total transactions that happen per year around the world.

Bad business models and greed continue to bog down NFC payments adoption

Ah, it’s like music to our ears, seeing a well respected research firm like ABI Research bringing concrete research that is reinforcing our concerns about NFC payments.

ABI postulates that business models, not technology, continue to bog down the near-term progress of NFC payments. ABI feels that this maybe coming to a close. “With these new business models, the opportunities are too good to pass up. MNOs, OEMs, and Google are tinkering with multiple business and partnership models and will most likely use a combination of one or more. This approach will help move the business forward,” says Beccue.

You mean in a complex ecosystem like NFC payments the MNOs can’t control everything? They would have to work with others and create true open ecosystems to get the maximum potential success? Shocker! Unfortunately, that hasn’t been the experience over here in the States where the joint ventures have collaborated and conspired so that they can attempt to control NFC payments for the vast majority of mobile subscribers. Over in the UK and other European countries similar NFC joint ventures are attempting the same. However, in the UK, Three UK are making a stand against this type of anti-competitive behavior.

What you can expect to find in the new ABI NFC payments report

We don’t usually post content tables for NFC reports, but we do in this case because we feel ABI Research has done such a thorough job. We want you to be able to get a sneak peek at the topics covered without having to leave NFC Rumors.

EXECUTIVE SUMMARY

NFC MOBILE PAYMENT BASICS

MARKET ISSUES

TECHNOLOGY ISSUES

MARKET FORECASTS

COMPANY DIRECTORY
ACRONYMS
LINKS TO RELATED RESEARCH

There have been NFC payment reports that predict $1 trillion by 2016 and some that have played it safe by projecting that NFC payments will be worth around $70 billion. ABI Research aren’t afraid to stick to their guns, and we like the fact the report calls it like it sees it. If you would like to grab yourself a copy of the ABI Research NFC payments report or learn more, click here.