Mobiles to help drive contactless payments

Embedding near field communications into handsets will turn them into a 'mobile wallet'

Mobile phones equipped with near field communications (NFC) technology will generate revenues of over $75bn globally by 2013, according to Juniper Research.

The analyst firm predicts that embedding NFC into handsets will turn them into a "mobile wallet" that will be increasingly used as a method of payment.

O2 began trialling the technology in November 2007, embedding an Oyster travel card and contactless payment card into a phone.

Juniper Research believes that this system could help drive relatively low value purchases such as refreshments, tickets and food, and should reach a " tipping point" by 2013.

"NFC will achieve traction initially in developed countries and regions, and Japan is already leading the way with FeliCa-enabled phones," said Howard Wilcox, the report's author.

"North America, western Europe and countries such as Korea, Singapore and Australia are likely to see service take-up."

The Far East & China, North America and western Europe are expected to be the biggest adopters, representing nearly 90 per cent of the market by 2013, according to the report.

Although only a handful of NFC-enabled phones will ship next year, the market will begin to ramp up from 2010 onwards and by 2013 one in five phones should be NFC-capable.

However, security firms have raised concerns surrounding the use of smartcard technology as a form of payment, especially following the news that researchers managed to crack the Oyster card system.

"While trial results so far have been encouraging, the industry as a whole will need to convince consumers and merchants of the merits of yet another payment mechanism on top of cash, cheques, credit and debit cards," said Wilcox.