Shipments of NFC-enabled handsets will likely grow about 100 percent this year to almost 200 million, according to consultancy firm Deloitte. The figure appears as part of the firm’s predictions for what will happen in the technology, media and telecoms sectors during 2012. Deloitte adds that sales of NFC-based smartphones, tablets and e-readers may reach 300 million in 2013. NFC technology will have a wide array of uses, the report says, especially payments but also gaming, security, authentication and information.

“It has long been believed”, says the report, “that a critical mass of NFC readers at retailers – combined with ubiquitous smartphones and tablets – would provide the required environment for the digital wallet to take off”. However, Deloitte warns, consumers may not yet be completely comfortable with using handsets for making payments. It points to recent surveys that have recorded consumer concerns. However sentiment could shift quickly over the next few years to a more positive attitude, it says.  

But what about 2012? Consumers have misconceptions that need to be countered. NFC is “significantly more secure” than conventional payment technology including cards with magnetic strips. But consumer’s views need to be corrected. Unelss they are, adoption may lag. Also, only new retail POS technology can handle NFC transactions unlike older infrastructure. This might hold back NFC transaction levels until early 2013. Only two percent of merchant locations in the US had upgraded their terminals to NFC as of mid-2011 says Deloitte.  The upgrade cycle for terminals is only every seven to ten years.  NFC handsets will also face competition from contactless debit and credit cards.