The mobile payments market will experience "explosive growth" next year, according to a report.
Market research firm iSuppli has predicted worldwide shipments of mobile phones will reach 220.1 million units in 2014 compared with 52.6 million in 2010 for units with built-in near field communications (NFC) capability.
Jagdish Rebello, principal analyst at iSuppli, said growth is being driven by Nokia's NFC-integrated handsets which will be introduced in 2011 and Google's Android 2.3, which supports NFC.
NFC uses magnetic field induction technology to enable simple and secure communications.
"This is the mobile payment revolution on the verge of being unleashed by NFC technology. With NFC technology expected to be integrated into Nokia's mobile handsets and Google's Android operating system, the first shots of this revolution will be fired next year," said Rebello.
"iSuppli believes that 2012 will be the make-or-break year for NFC," Rebello said. "With all the ongoing and planned NFC trials in different regions of the world, as well as support for the technology by major stakeholders, including wireless operators, financial institutions and banks, it is imperative that business models be established that allow each of the nodes to see value in offering the service," he added.
Contactless cards are currently in circulation for credit cards, transport tickets and are used in some food stores. NFC allows 'tap-and-go' style payments using mobile phones at in-store terminals by incorporating contactless card technology into handsets. Alternatively, micro-SD cards with NFC-enabled chips can be inserted into mobile phones.
Click here for Juniper Research's report on mobile payments market opportunities for business.