NFC Smartphone Transactions Will Not Meet Forecasts

HAMPSHIRE, U.K. -- Retail smartphone transactions performed using near field communication (NFC) technology will not reach previous forecasts, according to a report published yesterday by Juniper Research.

Global NFC retail transaction values are expected to reach $110 billion in 2017, significantly below Juniper's earlier $180 billion forecast.

The shortfall will primarily come from North America and western Europe, the report, called "NFC Mobile Payments -- No Contact Needed," added.

As for why NFC transactions are expected to come in way below forecasts, Juniper cited one main reason: Apple Inc.'s decision not to include an NFC chipset in its iPhone 5 smartphone.

In fact, the decision is so important that NFC will now have lower visibility and cause fewer opportunities for consumers to make payments, which could lead to "NFC indifference" in the short term, the research firm concluded.

"While many vendors have introduced NFC-enabled smartphones, Apple's decision is a significant blow for the technology, particularly given its previous successes in educating the wider public about new mobile services," said Dr. Windsor Holden, author of the report. "Without their support, it will be even more difficult to persuade consumers -- and retailers -- to embrace what amounts to a wholly new means of payment."

Lower than expected adoption of Google Wallet and a delayed launch of ISIS' mobile wallet will also have a negative effect on the market, relayed the Juniper report.

However, Dr. Holden's report did note one bright side regarding NFC. Despite Apple's feedback, NFC trial consumer feedback, conducted at the 2012 Summer Olympics in London, as well as in Singapore, "has been extremely positive, suggesting strong latent interest when services are more widely deployed."