The market for NFC-ready POS terminals continues to show strong momentum in 2016 with annual shipments anticipated to reach an estimated 16.1 million units worldwide, according to a new report from analyst firm Berg Insight.

The attach rate for NFC was highest in European Union and North America, which received 93 percent and 92 percent, respectively, of enabled terminals. NFC was a popular feature in other major markets also, including Brazil, Turkey and China.

On a global basis, almost 3 in 5 POS terminals shipped in 2016 included NFC. Berg Insight projects that the global installed base of NFC-ready POS terminals will grow at a compound annual growth rate of 17.9 percent — from 45 million units in 2016 to 86.9 million units in 2020. As a result, more than 77 percent of the world's POS terminals will be NFC-ready in 2020, up from 46 percent in 2016.

While the installed base of NFC-ready POS terminals has grown quickly, the contactless technology has not been activated in many cases. This is now changing, and Berg Insight estimates that approximately 15 million POS terminals accepted contactless payments with Visa payWave, MasterCard PayPass or UnionPay Quickpass in mid-2016.

"The mPOS terminal market is growing faster than the traditional POS terminal segment and there are more than 80 vendors active on the global market today" said Johan Fagerberg, senior analyst at Berg Insight.

The attach rate for NFC in the mPOS segment is anticipated to reach 45 percent in 2016 as NFC-ready mPOS terminal shipments reach 8.2 million units. Berg Insight forecasts that global shipments of NFC-ready mPOS terminals will grow at a CAGR of 41 percent over the next four years to reach 32.4 million units by 2020.

“The growth is driven by the increase in mPOS terminal shipments from 18 million units in 2016 to 42.3 million units in 2020, as well as by growth in the attach rate from 45 percent to 77 percent," Fagerberg said.