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Half of world's POS terminals will be NFC-ready by 2017 - Berg Insight

07 June 2012  |  11718 views  |  5 RBS contactless card

The number of NFC-ready point-of-sale terminals around the world is set to soar over the next few years, from 3.9 million in 2011 to 43.4 million in 2017, claims Swedish research firm Berg Insight.

The market for NFC-ready POS terminals grew fiercely in 2011, with annual shipments doubling to an estimated 2.5 million units worldwide, says the report, taking the total number to just under four million - around eight per cent penetration.

With Berg Insight forecasting a compound annual growth rate of just shy of 50%, this number will rise to 43.4 million units in 2017, meaning that 53% of all terminals will be NFC-ready.

The penetration rate is projected to be highest in North America where an estimated 86% of terminals will be NFC-ready by 2017. In Europe, Berg predicts the rate will hit 78% but take-up will be slower in the rest of the world, only reaching 38%.

The popularity of mobile wallets will help drive the move to NFC terminals and require support for value-added services such as coupons, loyalty cards and daily deals.

Lars Kurkinen, telecom analyst, Berg Insight, says: "Mobile wallet services will create an unprecedented opportunity for retailers to interact with consumers in real-time while their purchasing decisions are being formed, for instance by delivering personalised offers in real-time while consumers are inside the shop."

Comments: (5)

Ketharaman Swaminathan
Ketharaman Swaminathan - GTM360 Marketing Solutions - Pune | 08 June, 2012, 17:05

In other news, "Three quarters of NFC-based mobile wallets will shut down by 2014". 

"The popularity of mobile wallets will help drive the move to NFC terminals". This must be news for mobile wallet providers who grumble that lack of NFC terminals is the biggest hurdle for their mainstream adoption.

While NFC might arguably improve the customer experience marginally, it absolutely won't provide "unprecedented opportunity for retailers to interact with consumers in real-time". Hasn't Berg Insight heard that realtime offers have been facilitated by non-NFC technologies for several years now? 

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Nick Collin
Nick Collin - Collin Consulting Ltd - London | 11 June, 2012, 10:36

I agree with Ketharaman.  These sorts of forecasts are pure fantasy!

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Arun Anand
Arun Anand - Enrst and Young - New York City | 11 June, 2012, 12:22

I agree with Ketharaman that labeling this as "unprecedented opportunity" is stretching it too far. However, I also want to point out that while real-time offers using non-NFC based technologies have been around for quite some time they are vastly dependent on customers proactively using (or activating) their location based services on their smartphone. NFC will allow the retailer to take control and push real-time offers to the customer and as such will be able to reach more customers. Good observation nevertheless. 

 

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Ketharaman Swaminathan
Ketharaman Swaminathan - GTM360 Marketing Solutions - Pune | 11 June, 2012, 13:35

@NickC & @ArunA: Thank you for your comments.

@ArunA: LBS is only one example of a non-NFC technology that permits realtime interaction via "geo-fenced" offers. Here, I agree with what you say about the need for the LBS service to be on. In fact, I'd go one step further and claim that, given rapid battery depletion problem in many smartphones when GPS / LBS is on, geo-fenced offer technology is unlikely to reach mainstream adoption for a while. However, non-NFC technologies include others that are based on credit cards. As long as the consumer pays via a certain enrolled credit card at a certain merchant, s/he automatically gets a realtime offer in her / his mobile phone. There's no need for any LBS service to be on. In fact, for SMS-based offers, there's no need for any mobile app to be on. For non-SMS-based offers, the rewards app has to be on, but that's no different from the NFC situation where the mobile wallet app must be on. Besides, in an NFC situation involving Google Wallet - not sure about ISIS though - the consumer must have opted in to receive offers from merchants in the first place, so a merchant can't unilaterally take control and bombard the consumer with offers.

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Arun Anand
Arun Anand - Enrst and Young - New York City | 12 June, 2012, 00:48

Point noted Ketharaman!

Thanks.

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