According to research firm Juniper Research, smartphone payments will rise exponentially this year, as retailers, mobile phone operators and consumers start to embrace mobiles offering near field communications (NFC) technology, which will be featured at the Mobile World Congress next week.
NFC will allow consumers to pay for low cost goods such as coffee or train tickets, up to a value of £15 by passing their mobile phones over a proximity reader. In the UK, O2 has plans to offer mobile phones with a built-in wallet, Everything Everywhere (T-Mobile and Orange), is working with MasterCard to roll out a commercial NFC service by the second quarter.
About 40,000 stores in the UK have NFC readers, capable of reading from mobile phones, and contactless debit and credit cards. They include Pret a Manger, and Little Chef. The Co-Op and McDonalds also plan to make the service available across their UK outlets.
NFC can be used in other applications, for example to verify the identity of a person entering a building or logging on to a computer, or to allow a customer to use their mobile phone as a hotel room key, in addition to mobile payments.
Outside the UK, France is developing the technology rapidly. There are plans to introduce it in the US, and the technology is already widespread in Japan.