NFC-Ready Point of Sale Terminal Gain Momentum

The “wave and pay” method of buying gas, groceries and more at retail stores and markets is crossing the chasm. The market for near-field communications (NFC)-ready point-of-sale (POS) terminals in 2014 began to crest, with annual shipments reaching an estimated 9.5 million units worldwide, representing 28 percent of the install base. But, a challenge remains in actually turning the technology on.

According to Berg Insight, the attach rate for NFC last year was highest in Western Europe and North America, where 80 percent and 75 percent respectively of the POS terminals shipped featured NFC.  NFC was also a very popular feature in many other major markets worldwide, including Brazil, Turkey and China. On a global basis, two out of every five POS terminals that shipped in 2014 included NFC.

Going forward, the analyst firm forecasts that the global installed base of NFC-ready POS terminals will grow at a compound annual growth rate (CAGR) of 28.4 percent, up from 21.4 million units in 2014 to 74.9 million units in 2019. As a result, more than 70 percent of the world’s POS terminals will be NFC-ready in 2019.

Yet while the installed base of NFC-ready POS terminals has grown quickly, the contactless technology has in many cases not been activated. Berg Insight said that this is beginning to change.

To wit, Berg Insight researchers estimate that approximately 9 million POS terminals accepted contactless payments with Visa payWave, MasterCard (News - Alert) PayPass or UnionPay Quickpass at the end of 2014. This is a major increase from 2012, when just 2.6 million POS terminals worldwide had the contactless features enabled.

“The sharp increase marks yet another milestone in the industry’s move towards contactless payments and mobile wallet services,” said Lars Kurkinen, senior analyst at Berg Insight. “The data shows that merchants have started to embrace NFC, which up until now has been a missing piece in the puzzle.”