NEAR FIELD COMMUNICATION MARKET ANALYSIS

Near Field Communication Market Size and Trends

The global near field communication market is estimated to be valued at US$ 29.01 Bn in 2024 and is expected to reach US$ 88.42 Bn by 2031, exhibiting a compound annual growth rate (CAGR) of 17.3% from 2024 to 2031.

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Near Field Communication or NFC technology has seen significant growth over the past few years driven by increased adoption in mobile payments and other contactless applications across major economies worldwide.

The market is expected to witness strong growth during the forecast period supported by wider commercial use of NFC technology. Rising digital payments and focus on safety and convenience are compelling users to adopt contactless payment options like mobile wallets. Furthermore, the integration of NFC in other IoT devices beyond payments such as access control, identification, and interaction with connected home appliances is expanding the scope of the technology. Manufacturers are also focusing on enhancing the capabilities of NFC by leveraging technologies like AI and biometrics to offer value added consumer experiences across sectors. The growth of 5G networks will further accelerate the deployment of NFC-embedded devices and fuel new use cases.

Growing use of contactless payments

The use of contactless payments through near field communication technology has been growing rapidly in many parts of the world. As consumers have become accustomed to the ease and convenience of tapping their credit or debit cards at point-of-sale terminals, they are increasingly defaulting to contactless transactions over traditional chip-and-PIN or cash payments. This change in consumer payment behavior has been driven by a few key factors.

Firstly, contactless payments simply take less time and are more convenient than inserting a card into a chip reader or handling cash. As lives get busier, customers value speed and efficiency in their daily transactions. Furthermore, the recent COVID-19 pandemic has accelerated a shift away from cash usage and towards touchless payment options due to hygiene concerns. Merchants also prefer contactless acceptance as it reduces delays in checkout lines and increases transaction throughput in their stores.

Secondly, many financial institutions have actively promoted the uptake of contactless payments by upgrading customers' cards and mobile wallets to support NFC technology as standard. Larger payment brands like Visa, Mastercard, and American Express have also raised consumer awareness about contactless through marketing campaigns highlighting the ease and security of tap and pay. The resulting increase in the number of contactless-enabled cards and devices in circulation is directly fueling the growth of contactless transactions.

Finally, more merchants across various industries from retail and F&B to transportation and event ticketing are investing in NFC-capable point-of-sale terminals to offer their customers a fast and convenient payment experience. As contactless acceptance locations continue to expand in coverage and number of transaction limit increases, it reinforces consumer preference for tap payments over other options.

This sea change in payment habits towards using contactless technologies bodes well for further growth in the near field communication market as financial institutions and merchants respond to demands for enabling contactless experiences across more channels and use cases.

Increasing deployment of NFC in non-payment applications

While payments remain a core use case, near field communication is increasingly finding diverse applications beyond simply buying goods and services. NFC functionality integrated into smartphones and other connected devices allows for seamless interactions and data transfers between devices with just a tap. Beyond payments, popular domains where NFC is gaining ground include transportation, identification, access control, product information lookup, and social networking/gaming.