Analyst says services, not payments, will drive NFC to mass market

Last updated: 20 March 2014

Let’s say you are one of the lucky consumers that purchases one of the 100 million NFC-enabled mobile devices that will ship worldwide in 2012.  How do you picture yourself using it?  To buy your morning coffee quickly with just a wave of your phone? Or for some other application like pairing devices and reading smart posters and tags?

Forrester Analyst Thomas Husson thinks it’s more likely to be the latter.

“I continue to believe that most consumers using an NFC device in 2012 will more likely use it for device-pairing or data-sharing purposes than for payments,” Husson writes on the Forrester blog. “Pairing NFC accessories and reading NFC smart tags will open up new opportunities. NFC will be a key technology for interacting with the world around you.”

In a blog post by John Cox of Network World about a new Forrester report on NFC, Husson is again quoted saying that these services other than payments will be the real driver for mass market adoption of the technology:

“The key long-term driver for NFC technology is that it can enable many new product and service experiences beyond just mobile contactless payments. The list of new use cases is long: convenient transport experiences, next-generation shopping experiences, authentication and identity management solutions, or immersive marketing experiences.”

I agree that while contactless payments are getting the most buzz right now, there is so much more to NFC than just payments – mobile security being one of them. What’s great about the list that Husson notes is that they are all services that can be deployed easily by vendors, and get to market quickly.

Not only that, but consumers are more likely to trust these kinds of services over payments, initially. I think that using value-added NFC services and applications will build consumer’s confidence in the technology, which is necessary for contactless payments to really take off.  Also, it will get consumers comfortable with waving instead of swiping – a really big step towards changing consumer behavior with payments.

As I said on our blog back in May: “Give consumers secure and easy-to-use technology, lots of ways to use it, and the most advanced handsets. This is a great combination to entice consumers to get on board with NFC.”

Husson’s full report claims that one fourth of all U.S. consumers will have an NFC phone by 2016.  By then, I think we’ll be using the technology every day for non-payment applications and services, and NFC contactless payments will be ready for the spotlight.