NFC payments to reach tipping point in three years?

The market for contactless mobile payments using near field communications (NFC) is set to reach a tipping point over the next three to five years, according to a new report by Juniper Research.

NFC mobile wallet devices will remain limited next year - except in the Far East and China region where they are already established - but the number of devices shipping will begin to ramp up from 2010 onwards, says Juniper.

By 2013, one in five phones will have NFC, it predicts.

The analyst forecasts the gross transaction value of relatively low value purchases - such as refreshments, tickets and food - made via NFC will exceed $75bn globally by 2013, with the lion's share of contactless business being done in the Far East and China, North America and Western Europe.

Report author Howard Wilcox said in a statement: "NFC will achieve traction initially in developed countries and regions, with Japan already leading the way with FeliCa-enabled phones. North America, Western Europe and countries such as Korea, Singapore and Australia are likely to see service take-up."

But NFC take-off is still dependent on the mobile industry getting consumer buy-in.

Wilcox added: "Whilst trial results so far have been encouraging, the industry as a whole will need to convince both consumers and merchants of the merits of yet another payment mechanism on top of cash, cheques, credit and debit cards, and to allay understandable - even if unfounded - fears and scepticism about the security of the mobile wallet."