Contactless m-commerce fails to take off

Contactless m-commerce fails to take off

The development of contactless mobile payments has failed to live up to expectations and the technology will account for just a fraction of the value of commerce transacted over cell phones this year, according to data from ABI Research.

The firm says the value of mobile commerce transacted via non-NFC methods - SMS, Internet and applications - will total $1.6 billion in 2009. In contrast contactless mobile commerce will be "minimal".

Dan Shey, practice director, ABI Research, says: "NFC is the 'holy grail' that provides the easiest user experience. Other methods require more work and expertise from the consumer."

Yet, despite the benefits of contactless, the development of the NFC market has not met early expectations, a failure, says Shey, not of technology but of unclear business models.

Non-NFC platforms are filling this gap, with mobile Internet shopping seeing the largest slice of the m-commerce pie, with sites like Amazon and eBay attracting increasing numbers of subscribers.

ABI says demand for mobile commerce services is growing although drivers differ around the world. Consumers in industrialised countries are becoming comfortable with using their mobile phones for more than just traditional communications whilst in the developing world, the services open up financial services to millions of unbanked people.

NFC technology got a boost earlier this week with the news that Barclaycard and wireless operator Orange are forming a strategic alliance that will see them push through the development and adoption of contactless mobile payments services.

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