NFC revolution fails to materialise

By Gareth Morgan
21 Jul 2011 View Comments
Google Wallet mobile payment app

Analyst firm Gartner has poured cold water on the prospects of phone-based payments becoming mainstream any time soon, noting that growth in mobile payments was lower than it had expected.

Gartner predicts that across the globe, the amount spent via mobile devices will rise from $48.9bn (£30.1bn) in 2010 to $86.1bn in 2011.

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While this represents significant growth, much of it comes from developing nations, where mobile money systems have flourished in some locations but not others.

Meanwhile, the anticipated explosion of near field communication (NFC) in developed countries has failed to materialise.

“Companies are trumpeting the prospects of near field communication without realising the complexity of the service model,” said Sandy Shen, a Gartner analyst.

In 2011, the vast majority of mobile transactions conducted in developed countries will take place via mobile apps stores, not through using NFC-enabled handsets, Shen added.

Earlier this year, Google launched its mobile wallet application for US-based users of its Android smartphone operating system. Meanwhile in the UK, mobile operator O2 is expected to introduce a mobile wallet system for its customers some time in 2011.

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