Contactless mobile payments growing
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The number of contactless payments made via mobile handsets will reach 148 million globally this year, according to a study conducted by Juniper Research.
Samsung and Apple will account for approximately 70 per cent of new customers.
The study showed consumers have been receptive to this payment method, predominantly because of their strategic placement. When Apple Pay was introduced in China, nearly 40 million payment cards were registered to the service in 24 hours in mid-February.
Nearly one in five point-of-sale terminals in the US are now contactless-capable, with the report finding this will see smartphones be the number one driver of contactless payments in the US. The report also revealed banks and leading “over the top” players will deploy Host Card Emulation-based (HCE) models.
“The combination of HCE and tokenisation is extremely attractive to banks. HCE means that they are not dependent on a mobile operator to enable the service; tokenisation reduces the burden on the issuer and allows them to use their existing infrastructure,” research co-author, Dr. Windsor Holden said.
The study also found that NFC sticker-based solutions can be ‘risky,’ stating that in closed-loop solutions, ‘there’s a chance thieves could simply use all the money in the wallet at participating retail outlets.’
Questions & Answers
Q.Which companies are expected to lead the growth in new contactless mobile payment customers?
Which companies are expected to lead the growth in new contactless mobile payment customers?
Samsung and Apple are projected to account for around 70 per cent of new customers in the contactless mobile payments market. These companies are a primary driver of the expected growth this year.
Q.What is driving the adoption of contactless payments via smartphones in the US?
What is driving the adoption of contactless payments via smartphones in the US?
The report indicates that nearly one in five point-of-sale terminals in the US are now contactless-capable. This widespread availability is identified as the key factor making smartphones the primary driver of contactless payments there.
Q.Why are banks and 'over the top' players interested in HCE-based models for payments?
Why are banks and 'over the top' players interested in HCE-based models for payments?
HCE-based models are attractive to banks because they remove dependence on mobile operators to enable the service. When combined with tokenisation, this also reduces the burden on the issuer's existing infrastructure.
Q.What security risk is associated with NFC sticker-based payment solutions?
What security risk is associated with NFC sticker-based payment solutions?
NFC sticker-based solutions can be risky, especially in closed-loop systems. There is a potential concern that thieves could use all the money in the wallet at participating retail outlets if such a solution is compromised.
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