NFC chips are integrated in handheld devices, POS terminals, and other devices that store information and control transactions. These chips allow communication between NFC-enabled devices within a four-inch radius, and provide easy transactions and data exchange without the need to pair devices.
The increased integration of NFC chips in cell phones and tablets is contributing to serious market growth, and excitement over the new technology is expected to edge shipments of NFC chips from the hundreds of million into the billions in 2017.
But despite the increase in unit shipments, the global NFC chips market growth rate is likely to decline during the forecast period due to the slow adoption of NFC chips in the retail sector. High cost involved in NFC technology and the rising number of alternative technologies such as iBeacon and payment through fingerprint recognition are the leading factors contributing to the slow adoption of NFC chips.
However, the challenges the market faces will be met by even stronger positive trends, resulting in strong overall market growth. All told, 2.10 billion NFC chips are expected to be shipped in 2019, with the global market projecting a CAGR of 40.67% from 2014-2019.
Top trends in the NFC chips market
Increasing volume of NFC-based transactions
NFC-based transactions are growing and are expected to improve in tandem with overall awareness about the technology. Mobile transactions are expected to grow by 38% from 2015-2019 thanks to products like Google Wallet, a “tap and pay” application that allows Android users to make transactions in NFC-enabled environments. Microsoft is also planning to launch a tap and pay system, which will support the growth of the global NFC chips market in the coming years.
Emerging smart poster application
Smart posters are one of the more exciting emerging applications for NFC technology. These posters contains a sticker that holds digital data, which can be accessed by users through their NFC devices.
mWallet & NFC POS terminals
Mobile wallets allow users to save their debit and credit card information on mobile devices and make transactions directly at NFC-ready point of sale (POS) terminals. This mode of payment is getting popular among consumers because it’s quick and secure compared with other modes of payment.
An increased rate of adoption of contactless payment modes by retailers like Starbucks and McDonalds will drive the future growth of the global NFC chips market.
