NFC chipmaker NXP Semiconductors said it expects mobile wallets to be in half of new smartphones by the start of 2016 — and China will be the leading market, Bloomberg News reported.
“Half the smartphones will have mobile wallets by the end of 2015,” NXP CEO Richard Clemmer told the news service in an interview at the Mobile World Congress in Barcelona. “In Asia, they are very commonplace with contactless payments so we’ll see it develop much more aggressively, much more rapidly in China and Asia than in the U.S. and Europe.”
But U.S. adoption is expected to jump, and mobile payments volume is projected to increase by 1,000 percent in the U.S. by 2018 to more than $100 billion. Clemmer credits that momentum to Apple Pay. “I have bankers who told me that they changed the pharmacies where they get prescriptions in New York City because CVS doesn’t take Apple Pay and Duane Reade does,” Clemmer said. “Until you’ve gone and used you can’t identify with it, but once you’ve used it, you’ll see how powerful it is.”
NXP, which co-invented NFC along with Sony, makes both the chips that go into smartphones and those for contactless point-of-sale (POS) systems, so it’s making money from both the boom in smartphone mobile payments adoption and retailers’ upgrades of their POS devices required by the new Visa and MasterCard requirements. After Oct. 1, retailers will be liable for card fraud if their POS terminals can’t handle EMV chip cards, so many are upgrading — and most of the new terminals also support NFC transactions.
As a result, NXP’s NFC chipmaking business crossed the billion-dollar revenue line for the first time in 2014, up 37 percent from 2013.
Along with Apple’s mobile payments system, which is expected to expand to Europe later this year as well as China and South America, Google is also reportedly attempting to revive its NFC-based Google Wallet and PayPal will soon be selling a handheld POS device that can accept NFC-based transactions.