The Resurgence of NFC

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11 December 2014


  • I agree, I believe there will be renewed interest in NFC throughout 2015. In the markets where investments in NFC issuance and acceptance have been made, such as Australia and many parts of Europe, significant progress has been made. Leadership by the schemes (e.g. MasterCard's European mandate for new terminals to be NFC enabled from 2016, and all terminals to be NFC enabled by 2020) will help drive this forward.

    With support in the form of Apple Pay and the government's BuySecure initiative, there now appears to be real commitment to the EMV standards, bringing the USA in line with the rest of the world. By including NFC and tokenisation within Apple Pay, the bar has been raised further, making transactions of any value over NFC a convenient, safe and secure reality.

    By launching Apple Pay first in the USA, Apple chose a tough acceptance market where >95% of locations don't currently accept NFC. Therefore at an aggregate level, Apple Pay in the USA was always going to be something of a slow burn rather than an overnight success. Apple did well to achieve high (>80%) coverage of the credit card market from the start. But it will take time for
    (a) customers to upgrade to a iPhone 6 (or an Apple Watch that can be paired with an iPhone 5), and
    (b) merchants to upgrade terminals to EMV & NFC.

    Public statistics on actual Apple Pay usage are hard to come by at this early stage - a few positive disclosures have been made by merchants including Walgreens, McDonalds and Whole Foods. The InfoScout survey therefore offers a tempting snapshot of Apple Pay usage.

    But I think it dangerous to read too much into it.

    The sample was small at just 408 iPhone6 owners - the criteria being that they had shopped at a store that supports Apple Pay on Black Friday (arguably the most stressful shopping day of the year), and who were willing to participate in the research. For many this may have been their first opportunity to try Apple Pay, so no great surprise that the top two reasons for not using it were (1) they didn't know they could, and (2) they forgot.

  • James, thank you for your detailed and insightful comment, appreciate it.