The year 2014 will not be the year that near-field communication (NFC) takes off ? and neither will 2015. A growing number of alternative enabling technologies are readily available, and at lower cost to merchants and consumers.
Going forward, hosted card emulation (HCE) technology could aid adoption of NFC to some extent. HCE provides a cloud-based model for NFC that makes service provisioning much easier for issuers, developers, and other third parties. This has the potential to open the NFC market to more innovation and competition. However, this will happen only if the card schemes get behind HCE and security concerns are addressed.
Bluetooth low energy (BLE) will come to the fore, bringing with it a proliferation in BLE beacon payment services and hyper-location retail applications. However, the BLE beacon applications could be subject to hype that inflates what these types of application can deliver while obscuring their limitations.
Location-based advertising will be a priority focus in 2014, but service providers underestimate the challenges involved. Location-based advertising is rightly seen as promising because of the tangible benefits it offers to both retailers and consumers, but it is complex, and will become more so as location techniques and sources of data proliferate. At the same time, push-based location advertising has the potential to be very intrusive if not accurately targeted, and the need for precise targeting raises sensitive issues relating to data privacy.
Though the mPOS market is here to stay, consolidation in this increasingly crowded, commoditised area is inevitable and will begin in earnest during 2014. mPOS providers will need to achieve scale; this means addressing larger enterprises, where they will have to compete with traditional POS vendors. This will be particularly difficult for smaller mPOS providers ? the weaker ones will disappear, and the more promising will be acquired.
There will be rise in tablet-based mobile commerce in during 2014 and beyond. Consumer adoption of tablets is growing quickly, and their large screen size and enhanced graphics mean that they are better suited than smartphones to displaying and appreciating visual merchandise. As prefigured in the Ovum IAB survey of US brands, 2014 will also see more advertising spend on tablets: 75 per cent of respondents said that they expect to see their use of tablets increase during 2014 and 2015.
Over the last few years Apple has been putting in place the pieces that in 2014 will see it finally launch a full-fledged, unified mobile payments platform. This will have a positive impact on consumer uptake and use of m-payments, but may have a negative impact on other players hoping to gain market dominance in the space.
Amazon?s ambitions for mobile, and its reported acquisition of GoPago?s mPOS technology, mean it will finish 2014 with a wider and deeper portfolio of m-payment services.
Another prominent trend in 2014 is going to be the rationalisation and consolidation in the digital wallets space. There has been an explosion in digital wallet launches over the last two years and this is not sustainable. Consumers will not adopt multiple digital wallets and over the next year or so will consolidate their loyalty and spending into one or possibly two digital wallet services.
