The European market as a whole is already seeing a massive move to support contactless (EMV) payments, with some specific countries currently even further advanced than others, including the UK, Poland, Turkey, and France.
Mobile NFC Payments Infrastructure
There are over 160,000 MasterCard PayPass/ Visa payWave acceptance locations in Europe, such as shops, supermarkets and petrol stations, with around 280,000 contactless capable point of sale (POS) terminals deployed between them. Growth projections from the payment schemes and analysts – which suggest that within the next three to five years, around 80 percent of all European POS will support contactless – do not now seem unreasonable given the continued acceleration of deployment this year, including UK market announcements by the Post Office and HSBC in May.
Meanwhile, on the card side, year-end figures suggest that there will be over 100 million contactless payment cards in Europe from around 150 issuers. The feedback from those already being used is favorable in terms of increased transaction volume and value spend for merchants – showing not only (lower value) cash displacement, but also top of wallet placement amongst consumers. We can therefore safely assume that the trend is set only to accelerate.
NFC Adoption in Smartphones
Near field communication (NFC) capable smartphones are now becoming the de facto industry standard. Recent announcements related to Windows 8 NFC support add to earlier handset manufacturer announcements by Samsung and RIM, for example.
All of this increasing acceptance, and growing familiarity with secure contactless payments (always useful to beat off the latest round of scare mongering), coupled with growing general availability of NFC smartphones lays down a solid foundation for the mobile contactless payment rollouts which have already started in some European countries. For the other countries – mobile network operators, banks, and processors are already rushing to join the mobile NFC “land grab” in order to implement their elements (no pun intended) of the NFC ecosystem and attract new customers, whilst retaining existing ones.
While cards will remain complimentary, and in some cases the primary mass market option, the next two to three years should see significant shifts of volumes and values of transaction in Europe moving to mobile contactless. Combine this with the potentially even larger m-commerce market opportunities which V.me, PayPass Wallet, and some proactive new market entrants are already targeting, and mobile NFC payments in Europe is set for a few interesting years ahead.
It is evident that the European market is ready to embrace mobile NFC payments, so now is the time for industry players to take advantage of the opportunities on offer by investing in the mobile space. Our consulting and solutions are helping banks and service providers all over the world navigate these interesting times. Don’t get left behind!