Near field communication (NFC) capable smartphones are now becoming the de facto industry standard. Recent announcements related to Windows 8 NFC support add to earlier handset manufacturer announcements by Samsung and RIM, for example.
The European market as a whole is already seeing a massive move to support contactless (EMV) payments, with some specific countries currently even further advanced than others, including the UK, Poland, Turkey, and France.
There are over 160,000 Mastercard PayPass / Visa payWave acceptance locations in Europe, such as shops, supermarkets and petrol stations, with around 280,000 contactless capable point of sale (POS) terminals. Growth projections from the payment schemes and analysts – which suggest that within the next three to five years, around 80 percent of all European POS will support contactless – do not now seem unreasonable given the continued acceleration in 2013.
Meanwhile, on the card side, 2012 year end figures suggest that there are over 100 million contactless payment cards in Europe from around 150 issuers. The feedback from those already being used is favourable in terms of increased transaction volume and value spend for merchants - showing not only cash displacement, but also top of wallet placement amongst consumers.
All of this increasing acceptance, and growing familiarity with secure contactless payments, coupled with growing general availability of NFC smartphones lays down a solid foundation for the mobile contactless payment rollouts which have already started in some European countries. For the other countries – mobile network operators, banks, and processors are already rushing to join the mobile NFC “land grab” in order to implement their elements of the NFC ecosystem.
While cards will remain complimentary, the next two to three years should see significant shifts of volumes and values of transaction in Europe moving to mobile contactless. Combine this with the potentially even larger m-commerce market opportunities which some proactive new market entrants are already targeting, and mobile payments in Europe is set for a few interesting years ahead.
It is evident that the European market is ready to embrace mobile contactless NFC payment, so now is the time for industry players to take advantage of the opportunities on offer by investing in the mobile space. Our consulting and solutions are helping banks and service providers all over the world navigate these interesting times. Don’t get left behind!