The number of contactless transactions via mobile handsets is forecast to exceed 9.9 billion globally by 2018, up from just over 3 billion this year. That’s according to a new report from Juniper Research.
Two factors are expected to boost this growth: HCE (Host Card Emulation) and an Apple iWallet
HCE creates a ‘virtual’ smartcard within a payment app, which means that NFC transactions can be conducted without the need for a physical ‘secure element’ (e.g. SIM card that includes payment card information) within the handset. It also has the potential of reducing time-to-market and lets banks offer NFC payments without needing to partner with mobile network operators.
Rumours that Apple is planning an iOS-based ‘iWallet’ are likely to become reality by the end of this year, the report notes. This could enable contactless payment via Bluetooth Low Energy and a mobile connection. Any move by Apple into this type of ‘proximity payment’ would increase consumer awareness and indirectly drive the adoption of other mobile payment processes.
However, report author Dr Windsor Holden warned that these technologies would cause mobile network operators to lose out. He said “With the emergence of HCE, the operator role at the heart of the NFC value chain is no longer sacrosanct. Banks can now go it alone and as a result the scale of the operator opportunity is significantly diminished.”