The latest research by Juniper Research shows the adoption of NFC mobile payments will surge over the next three years to reach 300 million devices worldwide, with one-fifth of all smartphone devices having NFC capability.
Howard Wilcox, principal analyst at Juniper Research, says retailers with a high throughput of customers must consider upgrading PoS equipment to support NFC payments and stay competitive among the early adopters of contactless payment technology, such as Pret A Manger, Little Chef and the National Trust.
"Retailers will have to decide when they want to use NFC and when to change its Chip and PIN equipment," said Wilcox.
But retailers which have leased PoS equipment may be locked into a five to seven-year upgrade and replacement cycle. Wilcox says this could affect retailers' competitive advantage as contactless payments gain widespread acceptance in the UK in the next three years.
Mobile network operator O2 will apply for an e-money licence this year, signalling its commitment to support contactless payments in the UK in the near future.
Everything Everywhere has announced a partnership with Barclaycard to roll out a payment system later this year that uses mobile phones.