Analysts Predict Big Year For Mobile Payments

Industry analysts iSuppli have predicted that the use of mobile devices for payments will begin to take off in 2011, with 2012 being a ‘make or break’ year for the technology.

The turning point for mobile payments is arriving due to an increase in support for near-field communication (NFC) technology by companies such as Nokia and Google, according to iSuppli.

NFC is the key

NFC is a short-range high frequency wireless communication technology and has become familiar in systems such as the Oyster cards used in the London Underground.

iSuppli predicted that 13 percent of the 220.1 million mobile phone handsets expected to be sold in 2014 will include NFC technology supporting mobile payments.

“Imagine paying your bus fare, buying a plane ticket or making an ATM/credit card purchase simply by holding your cell phone near a wireless terminal,” said iSuppli communications and consumer electronics analyst Jagdish Rebello in a statement. “This is the mobile payment revolution on the verge of being unleashed by NFC technology.”

Rebello said 2012 will be the turning point for mobile payments using NFC, due to a critical mass of planned trials.

Nokia has said it will add NFC to its smartphones in 2011, while Google has included NFC support in the Android 2.3 operating system and the upcoming Nexus S handset. Broadcom has announced a processor for Android devices that supports NFC.

Security advantages

Google chief executive Eric Schmidt recently demonstrated a device believed to be the Nexus S and said it would support mobile payments.

At the time Schmidt argued NFC is extremely secure and that that tap and pay method is highly coveted by the financial services industry, which sees the value in the technology for preventing loss.

Earlier this month Google formally introduced the Samsung Nexus S, the first smartphone fitted with the long-awaited Android 2.3 (Gingerbread release) operating system. Google said the smartphone, which has a 4-inch Super Active-Matrix, Organic, Light-Emitting Diode (AmoLED) screen, like the members of the popular Samsung Galaxy S family.

The Nexus S will be on sale from December 20 at The Carphone Warehouse and BestBuy but will cost £550 for the sim-free version, over £200 more than the US release at $529 (£335). It will also be available for free within a £35 per month contract.