A new study from Juniper Research expects the number of consumers making contactless payments via their mobile handsets to reach 148 million this year, with Apple and Samsung together accounting for nearly 70% of new customers.
Juniper Research said that the industry has already received a strong stimulus from the launch of Apple Pay and Samsung Pay in selected key markets. It cited the case of the recent arrival of Apple Pay in China, where nearly 40 million payment cards were registered to the service in 24 hours upon launch in mid-February this year.
Furthermore, the research argued that with nearly 1 in 5 POS (Point of Sale) terminals in the US now contactless-capable, the infrastructure is now in place for that market to experience traction. It anticipated that NFC smartphones would be the primary initial driver of contactless payments in the US, given the limited number of cards that currently offer the facility.
The research also anticipated that models based on HCE (Host Card Emulation) would be widely deployed by banks and a number of leading OTT (Over The Top) players. It noted that HCE – where credentials and other sensitive data are stored in the cloud – had already been deployed by over 50 financial institutions, including Barclays Bank in the UK. However, the research was less optimistic about the prospects for solutions based around NFC stickers, arguing that phones using prepaid top-up contactless wallets without a secure element represented a significant security risk.
Dr Windsor Holden, Research Co-Author
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.
