Apple Pay, HCE to push NFC payment to over 500 mln users in next 4 years - report

According to a recent report from Juniper Research, entitled “NFC Mobile Payments: Apple Pay, Host Card Emulation & SIM Based Opportunities & Forecasts 2014-2019,“ Apple’s introduction of an NFC-based payment mechanism – Apple Pay – would stimulate the wider marketplace, helping to address the key challenges of contactless awareness and acceptance.

At the same time, the report observes that NFC solutions using Host Card Emulation (HCE) are steadily gaining traction within the banking sector. The report notices that several – including BBVA and Bankinter in Spain and CUA in Australia — have already launched commercial services, with pilot schemes in operation in countries such as Russia and New Zealand.

However, the report points out that both these developments threaten the opportunity within NFC for mobile network operators (MNOs). With Apple Pay, the secure element (SE) is embedded on the handset and controlled by Apple; with HCE, the SE no longer has to be physically present in the handset, again removing the requirement for MNO involvement.

Other findings from the report include the fact that three quarters of smartphones worldwide will contain an NFC controller chip by the end of the decade; and the fact that while NFC can provide retailers with a strong value proposition in terms of customer retention and loyalty opportunities in addition to payment, most retailers remain unclear as to its tangible benefits.