Contactless payment will migrate from cards to phones
28 June 2006
News
Card-based contactless payment systems may be new, but the signs already point to a coming migration from cards, with their limited functions, to mobile handsets making use of near field communications (NFC) to enable a whole range of sophisticated services including, but not limited to, contactless payment.
This migration will offer market participants a constantly changing and expanding set of opportunities to cement customer loyalty and reap the benefits of co-branding and cross-promotion.
ABI Research, when it first examined the contactless payment market one year ago, forecast that over 10 million contactless payment cards would be issued in North America during 2005. As the year drew to a close, that forecast proved highly accurate. Now, in the latest updated 'Contactless Commerce Research Service' ABI concludes that over 40 million cards, mini-cards, and fobs will ship globally in 2006.
"Contactless commerce is on a steep growth curve, but cards are only an intermediate step," says Erik Michielsen, director of ABI Research's RFID and M2M practice. "By 2010, more than 50% of cellular handsets -some 500 million units - will incorporate NFC capabilities that will be used not only for payments at points of sale and remotely, but also to access information from 'smart objects'. Imagine, for example, seeing a poster advertising a concert you want to attend. Hold your phone near the poster, and it connects you to a website where you buy your tickets, download them to the phone, and tap the phone at the turnstile to enter the show."
That one example suggests the multiple opportunities that will arise as this technology moves from card to phone. "Technology vendors, cards issuers and a wide variety of service and product providers will have to think holistically," says Michielsen, "not just about the technology - the silicon, antenna, memory and software - but about how to use the wealth of realtime usage information that more sophisticated systems can provide."
Michielsen adds that a key long-term challenge for the industry will be the management of customer relationships and brand identity across integrated payment platforms. "Within NFC, carrier and issuer cooperation has been inconsistent thus far, but consumer expectations will create increasing market pressure for industry players to find common ground on mutually agreeable business models."
Further reading:
RE+ South Africa 2026: From strategy to execution
News
Taking place at Gallagher Convention Centre in Johannesburg from 02 to 04 June 2026, this new addition to South Africa’s energy landscape introduces a focused commercial and industrial energy event within a proven exhibition platform.
Read more...
Africa Energy Indaba announces 2027 dates
News
Following the continued success and growing global impact of the Africa Energy Indaba, organisers have announced the dates for the 19th edition of the Africa Energy Indaba 2027.
Read more...
RS South Africa named master distributor for the Arduino UNO Q
RS South Africa
News
RS South Africa announced that it has been named Master Distributor for the Arduino UNO Q SBC platform across South Africa and the broader African region.
Read more...
Engineering in a world that cannot assume connectivity
Technews Publishing
Editor's Choice News
Across industrial automation, networking, and defence systems, engineers are rediscovering the importance of resilience and autonomy in an increasingly connected world.
Read more...
IOT secures major industry partnership
IOT Electronics
News
IOT Electronics has announced a new strategic partnership with Powell Electronics, becoming an Official Authorised Reseller in South Africa.
Read more...
Successful Proteus training conference
Dizzy Enterprises
News
Dizzy Enterprises recently hosted two hands-on Proteus Training Conferences, bringing together electronics professionals, designers, and enthusiasts to explore the latest capabilities of the Proteus Design Suite from Labcenter Electronics.
Read more...
Hitachi reinvents asset management solution
News
Hitachi Energy, in collaboration with Microsoft, is accelerating the digital transformation of essential infrastructure - from electricity networks and transportation corridors to heavy industrial operations - by reinventing how critical assets are managed and maintained.
Read more...
Mycronic releases mixed Q4 results
News
Mycronic reported mixed Q4 results for the year ended January to December 2025, while delivering record full year order intake and net sales.
Read more...
AGOA: Businesses should diversify or face significant exposure
News
Cross-border payments platform Verto has called on South African and African businesses to accelerate their transition toward a “post-AGOA” trade strategy following President Donald Trump’s signing of a one-year extension to the African Growth and Opportunity Act (AGOA).
Read more...
European components distribution growing
News
European electronic components distribution returned to growth in the fourth quarter of 2025, according to newly released figures from DMASS Europe.
Read more...
printer friendly version