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Google Wallet and Retail NFC Mobile Payments Ignite Buzz, Says ABI Research

August 10, 2011 by Mobile Payment Magazine

Recent developments in contactless payment technology are generating renewed interest, and suggest that the long-delayed dream of comprehensive contactless payment systems may finally be approaching reality. The introduction of Google Wallet and the expectation that several new NFC-enabled smartphones will reach consumer markets soon have created a sense of optimism.

According to ABI Research, in 2010 only about 10% of total POS terminal shipments included some form of contactless technology. While the analyst firm does not agree with some of the wilder media predictions for contactless POS growth – for example that within 12 months, one third of all terminals in the US will accept contactless payments – it does forecast that 85% of terminals shipped worldwide will be contactless-enabled in 2016, driven by increased proliferation of contactless cards and especially, rapid adoption of NFC-enabled cell phones.

Senior analyst Craig Foster comments, “Contactless has the potential to change the way we pay for goods completely, significantly reducing time spent queuing at the point of sale. It also represents an almost perfect fit for the vending industry, because:

  • The increased speed and simplicity of check-out go hand-in-hand with the very essence of the vending machine – to provide goods quickly and conveniently;
  • The fact that small-value transactions – typically under $25 in the US – do not need to be authenticated by signature or PIN entry is very appealing to vending machine operators.”

M2M practice director Sam Lucero adds, “Contactless technology is also in the very early stages of adoption in ATMs: rather than inserting the card, a customer waves it in front of the machine and enters a PIN.”

Ingenico, VeriFone, and Hypercom are the three leading vendors of POS terminals and command most of the market. VeriFone recently completed the acquisition of Hypercom after satisfying the antitrust concerns of the US Department of Justice. Contactless terminals have formed an increasingly significant part of Ingenico’s portfolio in recent years, accounting for a claimed 21% of the company’s shipments in 2010.

ABI Research’s “Cellular-enabled POS Terminals, ATMs, and Vending Machines” study examines the overall market opportunity for each segment, with a particular focus on value chains, competitive landscapes, market adoption drivers and inhibitors, and technology issues.

ABI Research provides in-depth analysis and quantitative forecasting of trends in global connectivity and other emerging technologies. From offices in North America, Europe and Asia, ABI Research’s worldwide team of experts advises thousands of decision makers through 40+ research and advisory services. Est. 1990.

Source: ABI Research

Filed Under: Research Tagged With: ABI Research, Google Wallet, MobilePayments, NFC

China NFC Payment Transaction Values to Top $8 Billion by 2014, Says Report

August 4, 2011 by Mobile Payment Magazine

China could see more than $8 billion in mobile payments by 2014, according to ABI Research forecasts.

The Near Field Communication (NFC) market is moving forward on an uneven front. Google is aggressively supporting the technology through the latest generation of Android handsets from its partners such as Samsung. Nokia is introducing NFC-capable handsets, but the C7 and N9 only support non-secure applications and not contactless payment.

In China, however, device manufacturers and operators are keen to move ahead with contactless mobile payment. It will be interesting to see how ZTE, as a local OEM, implements its announced range of NFC smartphones and handsets.

Jake Saunders, VP for forecasting at ABI Research notes, “China is a big mobile payments market to play for. There were more than 868 million cellular subscribers as of the end of March 2011.”

China’s mobile payments industry is burgeoning, attracting many participants wishing to grab first-mover advantage and vie for a bigger slice of the pie. ABI Research estimates that NFC payment transaction values in China could surpass $8 billion by 2014. Financial institutions (China UnionPay), third party mobile payment service providers, and Mobile Network Operators (China Mobile, China Unicom and China Telecom) are all jostling for position. According to Saunders, “ABI Research believes the mobile payment market in China will largely adopt an MNO-led business model.”

The Chinese government has expressed a preference for an NFC device solution utilizing the 13.56 MHz frequency band. To break the classic chicken-and-egg cycle, there are bridging solutions intended to stimulate the contactless payment market. The principal one is contactless (NFC) SIM cards. WatchData’s SIMpass solution has attracted strong interest from all three operators.

As a result, more NFC handset add–ons are shipped than NFC-enabled mobile handsets: 2.5 million SIMpass add-ons and 50,000 SD add-ons, versus 45,000 handsets in 2010.

ABI Research’s “Mobile Payments in China” study, produced by the firm’s Singapore division, provides an overview of the contactless mobile payments ecosystem in China. It also explores the near-term regulatory directives and the payment technology competition among the key players, and points out the potential winners and losers.

Mobile Payments in China Report Overview

China is the world’s largest single mobile market. Indeed, China’s mobile payments industry is a burgeoning market. It is attracting a number of participants in an attempt to assume first mover advantage. While the market potential is very real, there is uncertainty over which proximity payment technology will ultimately secure dominance – RF SIM on the 2.4 GHz band versus NFC on the 13.56 MHz band. This survey attempts to provide an overview of the contactless mobile payments ecosystem in China. It also explores the near-term regulatory directives and the payment technology competition amongst the key players and points out the likely winners. The race to lead in China primarily exists among the MNOs, banking institutions and the third party mobile payment service providers. Each has its own competitive advantage and offering to consumers.

In this Report:

  • What are the opportunities for contactless payment in the Chinese market?
  • What standard does the government support?
  • How will NFC be implemented?
  • What is SIMpass?
  • Who are the key players in the Chinese mobile payment market?
  • What are the main bottlenecks?
  • How will the market evolve?

Target Audience:

  • smart card vendors
  • mobile operators
  • government planning departments
  • investment banks

Source: ABI Research

Filed Under: Research Tagged With: ABI Research, China, MobilePayment

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