NFC is technology of choice for mobile payments

Mobile payments are growing rapidly, spurring multiple competing technologies in various markets. A new industry report from Deutsche Bank shows NFC is the real winner in this market. Users of NFC payments are expected to grow to 516 million by 2019, up from 101 million in 2014 or a CAGR of 38.6 percent. The report uses numbers from Juniper that project the number of mobile payments in 2019 reaching 195 billion, up from 72 billion in 2014.

NFC received a big boost in this area when it was adopted by Apple Pay, which is currently the most used mobile payment service. Google also originally adopted NFC with Google Wallet, which now works alongside Android Pay. As a result, NFC-equipped terminals have been growing. There were 21.4 million NFC-ready POS terminals installed in 2014 and Berg Insight estimates 74.9 million will be rolled out by 2019, or about 70 percent of all POS terminals globally.

Customers are increasingly at ease with NFC mobile payments, as well. Strategy Analytics predicts more than 100 million people will use their NFC-equipped devices for this purpose in 2016.

But NFC is not the only game in town. Some technologies rely on QR codes, as in the case with CurrentC, created by US retailer consortium Merchant Customer Exchange and Tencent’s WeChat Wallet, the dominant form of mobile payments in China. Although Samsung Pay uses MST technology, which can be utilized at any terminal with a magnetic stripe reader, it is only adopted when NFC is not detected.

Google is now racing to beat Samsung with Android Pay in the UK, where Apple Pay has already launched. China manufacturers may have once been able to ignore NFC, which was easy in a country primarily using WeChat QR codes to pay for things. However, the technology is too big to ignore now. Last year, OnePlus was widely criticized for leaving NFC out of its latest flagship phone, and the technology’s growth has not slowed since then. Apple Pay launched in China in March and had 3 million users there within two weeks. It would not be long before NFC becomes an essential part of every smartphone.