A new report from Juniper Research predicts that the number of consumers using NFC contactless payment services will jump to 516 million by the end of 2019, a more than five-fold increase from 101 million today.

The introduction of the new Apple Pay NFC-based payment mechanism will stimulate the wider marketplace, helping to address the key challenges of contactless awareness and acceptance, the report asserts.

The report, "NFC Mobile Payments: Apple Pay, Host Card Emulation & SIM Based Opportunities & Forecasts 2014–2019," observes that NFC solutions that use host card emulation are steadily gaining traction within the banking sector.

Several, including BBVA and Bankinter in Spain, and CUA in Australia, have already launched commercial services, with pilot schemes in operation in countries such as Russia and New Zealand, the report says.

The report points out that Apple Pay and HCE both threaten opportunities within NFC for mobile network operators. With Apple Pay, the secure element is embedded on the handset and controlled by Apple; with HCE, the secure element no longer has to be physically present in the handset, again removing the requirement for MNO involvement.

As a result, said the report's author, Dr. Windsor Holden, "[T]he opportunities for network operator involvement are limited. Hence we are likely to see more operators reevaluating their existing commitments to NFC and possibly withdrawing from the space."

The report also maintains that:

• by the end of the decade, three-quarters of the world's smartphones will contain an NFC controller chip; and
• most retailers remain unclear as to the tangible benefits of NFC, which include improved customer retention and loyalty opportunities.

The free white paper, "Getting in Touch with NFC," is available for download at the Juniper website.