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NFC may boost lagging North American mobile payment market

Sep 05, 2013 Dave King

Despite robust growth in other global markets, North America has been slow to adopt mobile payment technology. Pacific Standard recently reported that Gartner data shows that global mobile transactions are expected to hit $235.4 billion this year. However, $37 billion of that comes from North America, exactly half of the $74 billion that Asian markets contribute to mobile payments.

Although many financial experts have been predicting a boom in mobile transactions for the last several years, the adoption rate in the Western Hemisphere has been behind that of other regions. Japan, Korea and Afghanistan have higher rates of mobile payments than the United States.

Admittedly, some markets are seeing a higher penetration rate because mobile solutions are more reliable than traditional banking services that are riddled with corruption and uncertainty in developing nations.

In the U.S., 90 percent of households have a bank account, according to Pacific Standard. That's an incredible rate compared to other countries, meaning that mobile transaction companies have their work cut out for them if they want to convince Americans to use their services.

Quicker services and NFC
The source suggested that winning over consumers may be as simple as addressing small-scale problems that the average American faces on a daily basis. Factors such as speeding up transaction times may be the main drivers for increased mobile payment adoption.

For example, mobile app Uber helps users call a taxi with a few quick actions, eliminating the need to hail a cab on the street corner. It's services such as this that may be useful in gaining loyal customers.

Finextra reported that near field communication (NFC) technology may be the service that makes faster payment periods a reality for American purchasers. Although it has yet to be adopted on a wide scale by vendors, experts expect it to become more popular in the coming years. Able to complete payments via contactless portals, NFC services allow consumers to quickly wave a card, smartphone or other gadget in front of scanners to pay for items.

Apart from retail outlets adopting NFC technology, the source reported banks are likely to invest in NFC-enabled ATMs in the near future.

With such opportunities abounding with NFC, mobile payment companies that integrate the technology into their services may be able to set themselves up for success. If combined with unique, easy to use features, NFC platforms may help increase the use of mobile transactions in the Untied States.