NFC Market By Application (Payment, Ticketing, Healthcare, Access Control, Information Exchange, Others), Product Type (NFC Tags, NFC Readers, NFC Chips, NFC Secure Elements, NFC-enabled Smartphones, Others), End-User (Retail, Transportation, Healthcare, Automotive, BFSI (Banking, Financial Services, and Insurance), Others), & Region for 2024-2031

NFC Market Valuation – 2024-2031

The Near Field Communication (NFC) market is expanding due to rising demand for safe, convenient, and efficient communication and transaction techniques in a variety of industries. NFC technology allows devices to connect wirelessly when they are near together, usually within a few centimeters. This characteristic makes it ideal for a wide range of applications including contactless payments, access control, data interchange, and smart marketing. The rise in digital payments is one of the key drivers of the need for NFC technology by enabling the market to surpass a revenue of USD 20.94 Billion valued in 2024 and reach a valuation of around USD 81.35 Billion by 2031.

NFC’s adaptability is driving its use in other industries as well. In transportation, NFC is utilized for contactless ticketing systems which allow passengers to board buses, trains, and subways by merely tapping their NFC-enabled devices. This improves the commuting experience by removing the need for actual tickets or cards. Furthermore, NFC is becoming increasingly important in smart home and office contexts where it enables simple pairing and control of smart devices improving automation and user convenience by enabling the market to grow at a CAGR of 18.49% from 2024 to 2031. 

NFC MarketDefinition/ Overview

NFC, or Near Field Communication is a short-range wireless technology that allows devices to communicate with one another while they are nearby, usually within a few centimeters. Consider NFC to be a form of very short-range Bluetooth that does not require pairing or human configuration. It’s intended to be a rapid, simple, and secure method for devices to share data. For example, when you touch your smartphone on a contactless payment terminal, NFC technology allows your phone to interact with the terminal and conduct the transaction.

NFC technology which enables devices to connect wirelessly across short distances is transforming many features of daily life. Contactless payments are one of NFC’s key applications. Users can conduct purchases quickly and securely by just tapping their NFC-enabled smartphone or card on a payment terminal. This convenience has resulted in the widespread use of NFC payments in retail outlets, public transit, and even vending machines.

The future use of NFC includes a variety of new applications that can revolutionize ordinary encounters. In the healthcare industry, NFC has the potential to transform patient care and medical data administration. For example, NFC-enabled gadgets can help healthcare providers communicate patient information securely and efficiently. Patients can wear NFC-equipped wristbands or carry NFC cards that retain their medical history making important information readily available in emergencies.

Will the Adoption of Mobile Payment Solutions and Contactless Transactions Drive the NFC Market?

The proliferation of mobile payment solutions and contactless transactions is a key driver of the NFC (Near Field Communication) market. NFC-enabled mobile payments are becoming increasingly popular among both consumers and companies due to their convenience, speed, and security. According to a Federal Reserve analysis, the use of mobile payments in the United States has continuously increased, with 43% of mobile phone owners making payments with their devices in 2020, up from 39% in 2019. The COVID-19 pandemic has further expedited this trend to contactless payments with the World Health Organization.

Another important market driver is the increasing integration of NFC technology into smartphones and other devices. The ubiquitous availability of NFC-capable gadgets fosters a strong ecosystem for contactless transactions. Furthermore, the development of NFC beyond payments into public transit, access control, and identity verification is driving market growth. For example, the American Public Transportation Association states that more than 80% of transit agencies in the United States use or plan to use contactless fare payment systems.

Will Security Issues Hamper the NFC Market?

The NFC (Near Field Communication) market is expanding rapidly owing to several important drivers. One key reason is the growing use of contactless payment technologies. According to Federal Reserve research, contactless payments in the United States increased by 150% between 2019 and 2021. The COVID-19 pandemic has hastened this trend with consumers looking for touch-free payment choices. Another important factor is the inclusion of NFC technology in smartphones. According to the GSMA, NFC-enabled smartphone shipments are estimated to total 2.2 billion units by 2025 accounting for more than 90% of all smartphone shipments. The broad availability of NFC-enabled devices is fostering a rich ecosystem for applications other than payments such as access control, transportation ticketing, and device pairing.

While the NFC business is showing promising growth, security issues remain a serious challenge that might deadlock its spread. The National Institute of Standards and Technology (NIST) has discovered many vulnerabilities in NFC systems including eavesdropping, data manipulation, and relay attacks. A study published in the Journal of Cybersecurity indicated that 67% of consumers are concerned about the security of contactless payments. These concerns are not unjustified, since the Federal Trade Commission reported a 70% increase in contactless payment fraud instances from 2019 to 2021. However, it is worth mentioning that the overall fraud rate for NFC transactions is still rather low when compared to traditional payment methods.

Category-Wise Acumens

Will Widespread Adoption of Smartphones Drive Growth in the Product Type Segment?

NFC-enabled smartphones are the main sector. This domination is partly due to the massive adoption of smartphones worldwide and their prominent role in everyday life. NFC-enabled smartphones provide a versatile platform for a wide range of applications including contactless payments, data sharing, smart home control, and public transportation access. The incorporation of NFC technology into smartphones has converted them into strong tools for smooth and secure transactions making daily tasks easier. As the number of smartphone users increases, so does the potential for NFC applications highlighting the relevance of NFC-enabled smartphones in the market.

The domination of NFC-enabled smartphones is also spurred by ongoing advances in mobile technology and an expanding ecosystem of NFC applications. Major smartphone manufacturers such as Apple and Samsung, continually include NFC technology into their products guaranteeing that a sizable section of the worldwide population has access to NFC functionality. This universal availability stimulates developers to design creative NFC-based solutions, hence broadening the spectrum of applications. For example, mobile payment services such as Apple Pay and Google Pay rely largely on NFC technology to offer safe, contactless payment choices. Furthermore, NFC-enabled smartphones are rapidly being utilized for digital identification, ticketing, and access control providing a versatile solution across sectors.

Will the Increasing Demand for Quick and Convenient Transaction Methods Drive the Application Segment?

NFC technology’s primary application is in the payment sector which includes both mobile and contactless payments. This domination stems mostly from the growing desire for quick, secure, and simple transaction methods in retail establishments, restaurants, and other payment locations. NFC payments enable customers to complete transactions with a single tap of their smartphone or NFC-enabled card, considerably speeding up checkout and improving the overall customer experience. The increasing use of mobile wallets such as Apple Pay, Google Wallet, and Samsung Pay has hastened the acceptance of NFC payments. These digital wallets use NFC technology to deliver a safe and smooth payment experience removing the need for traditional cards and currency.

The security aspects of NFC technology led to its domination in the payment industry. NFC transactions are extremely secure due to short-range communication and the use of encryption techniques. This ensures that sensitive payment information is safeguarded throughout the transaction lowering the risk of fraud and data leak. Furthermore, the COVID-19 outbreak has accelerated the use of contactless payments as consumers and companies seek safer, more sanitary ways to make transactions. NFC payment’s simplicity and safety have made them an indispensable component of the modern retail landscape fueling their continuous expansion and dominance. Furthermore, incorporating loyalty programs and promotional offers via NFC payments provides another layer of value promoting repeat purchases and increasing customer loyalty.

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Country/Region-wise Acumens

Will Rapid Diversification of Mobile Payment Services Drive the Market in the Asia Pacific Region?

The increasing diversification of mobile payment services is a primary driver of the Asia-Pacific NFC market. This trend is primarily driven by increased smartphone usage and demand for contactless payment options. According to the GSMA, the Asia Pacific area is predicted to have 3.1 billion smartphone connections by 2025 accounting for around 80% of total mobile connectivity. This broad usage of smartphones lays the groundwork for NFC-based mobile payment systems to thrive. Furthermore, the COVID-19 pandemic has hastened the migration to contactless payments with a Mastercard poll indicating that 91% of consumers in Asia Pacific converted to digital payment methods during the pandemic with 75% intending to continue using them afterward.

The major mobile payment services in the Asia Pacific area differ by nation, however, some of the most famous players are Alipay and WeChat Pay in China, Paytm in India, and GrabPay in Southeast Asia. These businesses have rapidly expanded their operations beyond basic payments to include loyalty programs, micro-lending, and financial management tools. This diversification is accelerating the acceptance and use of NFC technology. According to the People’s Bank of China, China’s mobile payment market which is dominated by Alipay and WeChat Pay, will generate 432.16 trillion yuan (about USD 62.2 Trillion) in transactions in 2021. In India, the United Payments Interface (UPI) which supports NFC payments, handles over 7.82 billion transactions worth 12.82 trillion rupees (about USD 158 Billion).

Will Increasing Activities by Key Players Drive the Market in the North American Region?

The NFC (Near Field Communication) market in North America is likely to expand significantly with the United States projected to be the fastest-growing segment in the area. This rise is primarily being driven by the increasing use of contactless payment systems and the widespread use of NFC technology across industries. The increasing need for contactless payment solutions is a key driver of the NFC industry in North America. According to the Federal Reserve Bank of San Francisco, the use of contactless cards in the United States has climbed from 0.3% in 2019 to 1.6% in 2021. This trend is projected to continue with a Visa survey finding that 65% of consumers would prefer to use contactless payments as much if not more than,

In the healthcare industry, NFC is used for patient identification, medical device pairing, and medication adherence tracking. The United States Food and Drug Administration has approved many NFC-enabled medical devices demonstrating that the technology is becoming more widely accepted in healthcare. Additionally, the retail industry is utilizing NFC for inventory control and consumer involvement. According to Zebra Technologies report, 75% of retailers aim to use NFC technology for inventory management by 2026. These broad uses of NFC technology across industries are likely to fuel market expansion in North America as key market participants continue to innovate and expand their products in response to the growing demand for NFC-enabled solutions.

Competitive Landscape

The NFC market is a dynamic and competitive space, characterized by a diverse range of players vying for market share. These players are on the run for solidifying their presence through the adoption of strategic plans such as collaborations, mergers, acquisitions, and political support. The organizations are focusing on innovating their product line to serve the vast population in diverse regions.

Some of the prominent players operating in the NFC market include

• Gemalto N.V.
• DeviceFidelity, Inc.
• Visa, Inc.
• Broadcom, Inc.
• STMicroelectronics N.V.
• Toshiba Corp.
• Samsung Electronics Co. Ltd.
• Identive Group, Inc.
• NXP Semiconductor
• Infineon Technology
• On Track Innovation Ltd.

Latest Developments

• In April 2024, The UAE’s hosting of the Miss World pageant sparked a surge in the NFC market, prompting companies like Pcard to finalize aggressive expansion plans in the GCC. The post-pandemic boom in events further accelerated industry growth.
• In December 2023, Apple caved into EU pressure, abandoning its NFC exclusivity stance and potentially expanding payment choices for iPhones. However, Google Wallet integration is dubious as Apple maintains control over its mobile wallet system.

Report Scope

NFC Market, By Category

Application

• Payment
• Ticketing
• Healthcare
• Access Control
• Information Exchange
• Others

Product Type

• NFC Tags
• NFC Readers
• NFC Chips
• NFC Secure Elements
• NFC-enabled Smartphones
• Others

End-User

• Retail
• Transportation
• Healthcare
• Automotive
• BFSI (Banking, Financial Services, and Insurance)
• Others

Region

• North America
• Europe
• Asia-Pacific
• South America
• Middle East & Africa

Analyst’s Take

In conclusion, the NFC Market is experiencing robust growth driven by the increasing adoption of mobile payment solutions, the proliferation of NFC-enabled devices, and the growing demand for seamless connectivity and convenience in various applications such as retail, transportation, healthcare, and smart homes. The market is poised for further expansion as businesses and consumers recognize the benefits of NFC technology in enhancing user experiences, improving operational efficiency, and enabling innovative services and applications.

Research Methodology of Market Research

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