Global NFC Market Size – Industry Trends & Forecast Report 2026
The global NFC market is estimated to have reached USD 17.5 billion in 2020 and is further projected to reach USD 39.8 billion by 2026, growing at a CAGR of 12.4% during the forecast period. The increasing penetration of smartphones in the developing economy is a key driver for the growth of the market. The increasing adoption of mobile payment services has led to the intensive utilization of POS with the launch of e-wallet and Apple Watch. Banking entities, payment gateways, and payment processors are expected to expand the capabilities for accommodating the new enhanced technology. The emergence of mobile wallet services has allowed users to pay for services through mobile devices or through cashless payment modes, which have further enhanced NFC market growth.
Global NFC Market Overview:
Near field communication (NFC) is a wireless technology that offers an exchange of data between the NFC technologies enabled devices. NFC is a short-range communication technique and an efficient alternative to communication technologies such as Wi-Fi and Bluetooth. NFC transfers data by bringing the devices closer or by touching them together. NFC enables the users to seamlessly share data between devices, use their mobile phone as an e-ticket, or pay bills wirelessly. The important benefit of NFC over Bluetooth is a shorter set-up period. Also, NFC works on devices that are not driven by a battery such as smart credit cards. NFC technology has various advantages such as versatility, safety, and convenience.
Global NFC Market Forecast and Trends
Growing adoption of wearable technology
Smart wearables and IoT devices are becoming increasingly popular by adding more functions, despite severe space and power limitations. When equipped with NFC capabilities, a wearable device allows payment at a store, accessing a mass transport system, or office building. For instance, SECORA Connect, an Infineon’s brand portfolio, is a solution family addressing the rising popularity of smart wearables and IoT devices. It is a system solution designed for being embedded into smart wearables to provide contactless secured payment, transportation ticketing, and other applications via Near Field Communication (NFC).
Increasing trend of mobile commerce
Mobile commerce is a rapidly expanding tech area that has witnessed unprecedented growth during the last decade. Nowadays, smartphone users use NFC technology to make payments. Moreover, with products such as NFC enabling POS systems, the mobile becomes an important means to transfer data. Various financial institutions are collaborating with mobile application developers to develop applications to enable consumers to carry out business transactions. The increasing trend of mobile commerce is boosting the growth of the global NFC market.
Issue of short-range communication
Near field, communication is suitable only for short-range data transfer. For data transfer through NFC technology, the communicating devices must be in close range or should have 4cm or less between them for communication to take place. This is a major drawback of the NFC technology. Its transmission frequency is 13.56 megahertz. Data can be sent at either 106, 212, or 424 kilobits per second, which is swift for a range of data transfers such as contact details to swapping pictures and music. Samsung Pay, Android Pay, and Apple Pay use NFC technology though Samsung Pay works have a different mechanism.
Security concerns related to NFC
NFC provides unreliable security against privacy protection for a device, which becomes vulnerable to inadvertent reception of malicious software or data. The NFC protocol has few safeguards against data sniffing and data modification. And since one of the most popular applications implementing this technology is the ‘Contactless Payment System’, security is a significant concern. As NFC does not involve authentication, the transfer of malware applications could also be a major threat to the user. Hence, a secure NFC application to implement the possible features of an NFC-enabled application securely is necessary to make the fullest use of this technology.
Impact of COVID-19 in the industry
The outbreak of COVID-19 had an impact on these segments due to the demand for retail stores across the globe. Moreover, contactless payment in supermarkets and shopping malls ware in high demand however, the COVID-19 outbreak can push people to contactless payment. For instance, in India consumers now experiences a quicker way to pay at entertainment venues, dining, and supermarkets including a Big Bazaar, PVR, and Reliance Retail among others. Furthermore, according to UK finance, around 77% of all UK retail spending was made by cards. This has been driven by the extensive acceptance of contactless payment and other forms of digital payments; therefore, this could be affected by the COVID-19 outbreak.
Global NFC Market: By Device operating mode
Based on device operating mode, the market is categorized as reader emulation, peer-to-peer & card emulation. Amidst this category, reader emulation is projected to witness the highest CAGR for the forecast period, as the majority of mobile phone and retail applications use NFC chip in reader emulation mode. There is high adoption of NFC-based mobile wallets, such as Goggle pay, Samsung pay, Apple Pay, and Android Pay, which are expected to witness the highest CAGR in the coming years, owing to the high demand originating from payments.
Global NFCMarket: By Product
Based on the product, the NFC market is segmented into SD cards, SIM cards, near field communication cover, near field communication ICs, near field communication readers, and field communication tags. Amidst this category, NFC tags and NFC readers are attributed to holding the largest share of the NFC market in the coming year due to the high demand originating from payments and access control segments. The ability of SIM cards for cashless payments with improved user experience is expected to improve the product market. Furthermore, increasing demand for connectivity between devices for sharing information and data through online and in-store payments in a retail store has also led to the growth of the NFC technology in the segment.
Global NFC Market: By Application
Based on application, the global NFC market is segregated into access control, ticketing, data sharing, medical devices, transaction, product identification, and others. The transaction application is estimated to dominate the business in terms of revenue in 2019. The proliferation of smartphones with an increasing need for a better consumer experience is expected to propel the demand. The ticketing segment enables the commuters to use the near field communication mobile for a contactless transport ticket. The NFC-based ticketing application stores the transit details digitally on the mobile phone and allows the passenger to tap the mobile phone for boarding. The technology has led to the implementation of a cost-effective transport ticketing solution, which is expected to enhance the customer experience.
Global NFC Market: Regional insights
The global NFC market is segmented into five regions including North America, Europe, Asia-Pacific, Latin America, and Middle East & Africa. Amidst this category, Asia Pacific is attributed to holding the largest share of the NFC market in the coming year as it has some of the world’s fastest-growing and leading industrialized economies. It is witnessing dynamic changes in the adoption of new technologies and advancements in organizations across industries. Also, the mobile payments market is significantly growing in Asia Pacific countries such as South Korea, China, Japan, and India. Thus, all these factors will boost the growth of the global NFC market.
· In June2020, NXP Semiconductors, Mastercard, and Xiaomi Inc. announced they are bringing more convenient and secure contactless experiences to Russia as the first phase of a European-wide roll-out with NXP’s mobile wallet solution.
· In February 2019, NXP Semiconductors collaborated with FeliCa Networks, Inc. to strengthen the mobile payment and ticketing ecosystem as part of Japan’s preparation for worldwide events in the future.
· In February 2018, NXP Semiconductors announced breakthroughs in GSMA-compliant eSIM solutions that radically make it easier for device manufacturers to bring consumers remote SIM provisioning and over-the-air updates with multiple Mobile Network Operator (MNO) subscriptions.
Key players for global NFCmarket include: NXP Semiconductors (The Netherlands), Qualcomm (US), Texas Instruments (US), STMicroelectronics (Switzerland), Thales Group (Sweden), Infineon Technologies (Germany), Sony (Japan), ams (Austria), Flomio (US), HID Global (US), MagTek (US), Avery Dennison (US), Identiv Group Inc (U.S), Broadcom Limited (A subsidiary of Avago Technologies) (U.S), Gemalto NV (Netherlands), Inside Secure (France) & other prominent players.These key players are focusing mainly on vertical integration activities and to gain competitive advantage players are also investing heavily on research & development activities to generate innovative technologies.
Scope of the Report
By Device operating mode
Ø Reader Emulation
Ø Card Emulation
Ø SD Cards
Ø SIM Cards
Ø NFC Cover
Ø NFC ICs
Ø NFC Tags
Ø NFC Readers
Ø Access Control
Ø Data Sharing
Ø Medical Devices
Ø Product Identification
Ø Asia Pacific
Ø North America
Ø Middle East & Africa
Ø Latin America