During our blog series, we looked at contactless payments from different point of views. We busted myths, showed the future of payment infrastructure which are all factors driving down the need for cash. But one questions in still unanswered: Is tap-and-pay here to stay?
Contactless is the new reality in payments
Again, numbers indicate the answer to this question: More than 1.5 billion smart payment cards were shipped globally in 2014, around 40 percent of them offering contactless transactions (Smart Payment Association, 2015). Visa cards add to this trend by stating that only in Europe, over the last 12 months more than 1 billion tap-and-go purchases have been processed. In fact, NXP’s own SmartMX2, our latest dual-interface microcontroller has reached 1 billion milestone in shipments.
The same trend can be reported for mobile payments. Every major player in the smartphone sector, including Apple, Google, Xiaomi, and Samsung, now support payments with NFC. About a year ago, the British firm Juniper Research predicted that the number of contactless transactions via mobile handset would exceed 9.9 billion globally by 2018, up from 3 billion in 2014. In fact, mobile payments are growing so quickly that analysts are having trouble keeping up. One estimate says that the value of global mobile transactions will be $1.5 trillion by 2017, while others say the Chinese market alone will amount to $1.4 trillion by the end of 2016. Any way you look at it, smartphones are the new reality in payments.
Of course this journey depends on how well ecosystem players master the challenges of which one is to build trust and deliver convenience by using widely agreed-upon standards. This is a team effort and requires industry collaboration on all ends as well as strong partnerships. By using standardized and compatible technologies, and by working together, across industries and applications, we can ensure that contactless payments are both seamless and secure.
An interesting example of how tap-and-pay adoption is growing is seen in transit in China. At the end of 2015 some of the largest cities in China began introducing mobile payment for transit. The added convenience of paying with something already in your hand, and being able to manage it on the go has proven appealing. We will look closer at what was needed to enable this seamless transition in an upcoming blog.
Mobile payments are clearly here to stay, and, as technology continues to expand the ways we can make purchases, we’re moving closer to what futurists have promised for some time – the cashless society. Which challenges do you see to make this move happen?