Factors influencing the slow rate of penetration of NFC mobile payment in Western Europe

Posted by: Jenny Minnema   /   0 Comment

Presented at: 12th International Conference on Mobile Business (ICMB2013), Berlin, Germany, June 2013; and the 2nd Cashless Society Roundtable, Dublin, Ireland, April 2013.

Researcher: Tatjana Apanasevic.

Abstract: Multi-functionality of smart mobile devices is continuously being enhanced demonstrating new capabilities for mobile service application areas. The Near Field Communication (NFC) technology implemented on the base of contemporary mobile handsets can provide considerable benefits to end-users. Indeed, range of areas where it could be applied is very wide, including contactless payment, mobile ticketing, client loyalty applications, smart advertisement applications, physical and logical access, and other functionalities.

Despite potential added value brought by NFC and a high level of diffusion of mobile phones in Western Europe, the level of penetration of the NFC based mobile payment remains low. A considerable number of trials have been initiated, however, large scale deployment of commercial NFC services cannot be seen. The main purpose of the paper is to identify and analyze different factors that influence the slow rate of penetration of NFC based mobile payment in Western Europe.

The paper presents a qualitative study based on experience of six NFC pilots implemented in Finland, France, Italy, the Netherlands, Norway, and the UK. The research findings confirm that a number of demand and supply barriers negatively affect the rate of the penetration of the NFC payment. The network externalities and the lack of consumer awareness about NFC services were identified as the most important demand side barriers. The most significant supply side barriers are the lack of uniform technological standards, the lack of NFC enabled mobile phones, and the coopetition issue. In addition, the interrelation between mentioned obstacles was identified. This fact means that a delay in the NFC payment’s diffusion is affected not by a single factor, but rather by a set of interrelated factors. The sources of these obstacles are related to the consumer acceptance, the specifics of business environment, and the technology.

Factors influencing the slow rate of penetration of NFC mobile payment in Western Europe”, Tatjana Apanasevic. In: the 12th International Conference on Mobile Business (ICMB2013), Berlin, Germany, June 2013; and In: the 2nd Cashless Society Roundtable, Dublin, Ireland, April 2013.

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