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Near Field Communication Missing in Action

Near Field Communication (NFC) was the leading contender among technologies that could enable U.S. mobile payments, like it already has in leading global mobile communication markets.

But, NFC has developed more slowly in America than anticipated, and will not offer viable large-scale mobile payment solutions for at least six years. In the mean time three existing technologies -- SMS, mobile Internet and downloadable mobile applications -- have the potential to deliver what NFC cannot.

"About half of all purchases made by consumers last year were made with cash," notes ABI Research senior analyst Mark Beccue. "Consumers would in many cases prefer cashless transactions when away from home."

So around the world solutions providers have leveraged SMS, mobile Internet and downloadable mobile applications to enable mobile commerce and payments. ABI Research calculates the potential revenue in 2013 from mobile transactions using these methods at about $18 billion -- a significant opportunity for payment processors.

A new ABI Research study examines the potential for mobile payments in four key vertical markets that will drive adoption: taxis, parking, movies, and Internet shopping.

While the latter is usually done using credit cards anyway, the first three are areas in which mobile payments could replace cash transactions. The research found that Internet shopping would account for almost three quarters of this mobile commerce revenue in 2013.

A further 15 percent would come from parking, with the balance split about evenly between taxi fares and movie tickets.

Beccue concludes, "Companies already seizing this mobile payment opportunity include parking solutions provider Verrus, Bharti Airtel and movie theater operators in India, and notably eBay and Amazon -- the world's largest e-commerce merchants -- which have enthusiastically embraced mobile transactions with very comprehensive offerings."

If you want to see NFC solutions in action, then you will have to visit Japan and South Korea -- still, by far, the most advanced mobile communication markets on the planet.

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