NFC Payments Soaring in China
Near field communications – so-called wave and pay – technologies may be stuck in a slow lane of adoption in the United States, but in China analysts say NFC is on a fast track to a projected $8 billion by 2014.
Key to this is that the Chinese government has expressed a preference for NFC, according to analysis from ABI Research.
The other key is the sheer volume of the Chinese mobile marketplace. Jake Saunders, vice president for forecasting at ABI Research, noted, “China is a big mobile payments market to play for. There were more than 868 million cellular subscribers as of the end of March 2011.”
A complication is that the device marketplace has yet to fully embrace NFC.
While Google has endorsed NFC and many new Android phones are scheduled to feature it, comparatively few NFC-equipped phones are currently on sale, in the U.S. or in China. ZTE, the predominant Chinese mobile manufacturer, has announced NFC-equipped phones but delivery is pending.
That is why ABI Research sees a booming market in China for NFC add-on cards (it counted sales of over 2.5 million add-ons in 2010 compared to sales of just 45,000 NFC-ready handsets). Such cards are intended to upgrade existing phones to handle NFC payments.
As for the U.S., analysts remain in agreement that NFC is coming – research firm Jupiter recently forecast global NFC transactions at $670 billion by 2015, with a significant share of that volume emanating from inside the United States – but there also is growing agreement that take-up is a year or two away.