NFC to take off in 2015

This year will be the year that contactless payment methods such as NFC will take off, according to Deloitte

This year will be the year that contactless payment methods such as near-field communications (NFC) take off, according to Deloitte.

The firm predicted the larger banks are likely to offer NFC payments via smartphone by the end of 2015, with 5% of NFC-enabled phones being used for contactless payments by the end of the year.

This increased use of NFC is set to come about because many of the major concerns from merchants, consumers and financial services firms have now been addressed.

This includes security, as NFC transactions made via a smartphone usually use tokenisation to protect the data being used.  

Deloitte suggested this could be further enacted with innovations in smartphone payment security, such as forced authentication when the payment method is used outside of a regular location.

Fingerprint readers are also already implanted into many smartphone handsets, and people are used to having their fingerprint checked for access to their phone.

But uptake may be slower in some countries, such as the UK, where there is an upper spend limit of £20 for contactless payments, therefore not making the payment process any easier in some cases.

Consumers in the UK are already familiar with this, however, and therefore may use NFC as often as they use contactless card payments, as it makes smaller payments much faster.

One of the difficulties will be ensuring customers are properly educated on the process of smartphone NFC payments and when and how it can be used.

The payment ecosystem needs to be created to ensure ease of use across devices where different types of fingerprint reader, tokenisation and components are used.

Once NFC has taken off, it is expected to be followed by payment processes such as coupon or membership applications like Zapp.

In 2014, mobile software firm Netbiscuits found 69% of UK consumers had not heard of NFC. Uptake of NFC adoption slowed to 36% between July and August 2014, despite steadily increasing earlier in the year.

But the introduction of the iPhone 6 and the release of Apple Pay in the US boosted these numbers, and this increased awareness is expected to boost the use of mobile devices for contactless payments.

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