Near Field Communication Systems Market Size 2024-2028

The Near Field Communication Systems Market size is forecast to increase by USD 29.63 billion, at a CAGR of  16.83% between 2023 and 2028. The growth of the market is contingent on several pivotal factors. Firstly, the increased adoption of contactless payments among consumers and businesses alike drives market expansion, offering convenience and security. Secondly, the integration of Near Field Communication (NFC) technology in smartphones facilitates seamless payment experiences, enhancing transaction efficiency. Additionally, rising government initiatives worldwide to promote digital payments and financial inclusion contribute significantly to market growth, fostering a conducive regulatory environment. These trends collectively propel the evolution of payment systems, emphasizing convenience, speed, and enhanced security measures. As digital payment technologies continue to evolve and gain traction globally, they play a crucial role in shaping the future of financial transactions, supporting economic growth, and meeting the evolving needs of consumers and businesses.

What will be the Size of the Market During the Forecast Period?

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Market Dynamics and Customer Landscape

Near Field Communication (NFC) systems refer to short-range wireless technology that enables seamless connectivity between compatible electronic devices. NFC systems use a transmitting device to send data to a receiving device when they are brought within a few inches of each other. Both passive NFC devices and active NFC devices can function as receiving devices. NFC technology is widely used in various applications such as mobile payments through services like Samsung Pay, Android Pay, and Apple Pay. Smartphones are the most common transmitting devices, while card readers serve as receiving devices in various industries like public transport. NFC systems offer several advantages, including convenient transactions, versatile applications, and secured access. The range of NFC systems is limited, typically around 10 centimeters, and they consume less power compared to other wireless technologies like Bluetooth. NFC systems also offer faster data transfer speeds, making them ideal for applications like file transfers and access control. Smart pairing is another key feature of NFC systems, allowing for easy and automatic device pairing. NFC systems are compatible with a wide range of devices and have various applications, including mobile payments, access control, and file transfers. The technology offers a convenient and secure way to make transactions and access controlled areas, making it a popular choice for businesses and consumers alike.

Key Market Driver

Increased adoption of contactless payments is notably driving market growth. Near Field Communication (NFC) systems represent a short-range wireless technology that facilitates simplified setup, convenient transactions, and enhanced security for electronic devices. This technology enables data exchange and contactless transactions between compatible devices, including smartphones, card readers, public transport touch payment terminals, and more. NFC systems utilize inductive coupling, electromagnetic coils, and data rates of up to 424 kbps for seamless data transfer. Two primary types of NFC devices exist, passive NFC devices, which require an external power source to function, and active NFC devices, which have their own power source. Passive NFC devices, such as contactless cards, rely on the energy from the transmitting device to function during the transaction. Active NFC devices, like smartphones, can function independently. NFC technology supports various applications, including card emulation, peer-to-peer mode, and file transfers.

In card emulation mode, NFC-enabled smartphones can act as contactless cards, allowing users to make mobile payments using services like Samsung Pay, Android Pay, and Apple Pay. In peer-to-peer mode, devices can exchange data directly without the need for a central server. The technology offers several advantages, such as easy connectivity, versatile applications, and secured access. However, limitations, such as power consumption and range, may impact its widespread adoption. NFC technology's data transfer speed and contactless nature make it an attractive alternative to Bluetooth for certain applications. Thus, such factors are driving the growth of the market during the forecast period.

Significant Market Trends

The growing adoption of NFC-equipped devices is the primary trend in the market. Smart wearables and IoT devices are becoming more and more popular due to their increasing functionality for various applications. If these devices are equipped with NFC built-in capabilities, the wearable device will allow users to pay in stores, grant access to public transport, or grant entry into office buildings. Companies such as Infineon Technologies offer NFC systems for wearable devices. For instance, SECORA is a system solution that is designed to be embedded into smart wearables to provide contactless secured payment, transportation ticketing, and other applications via NFC. Thus, it enables secure payments, convenient biometric authentication, and other applications.

Furthermore, in April 2022, MagTek launched the DynaProx family of touchless readers. DynaProx and DynaProx BCR deliver the next-generation touchless payment. Both models come with NFC technology, and DynaProx BCR adds a barcode camera for reading a wide variety of 1D and 2D barcodes. Thus, the increasing integration of NFC technology in devices such as wearable devices and IoT devices, coupled with their increasing adoption, will leverage the application of NFC systems and, in turn, will drive the market in focus during the forecast period.

Major Market Challenge

Increasing cybercrime issues are a major challenge to the growth of the market. Contactless payment systems based on NFC technology embedded in cards, mobile devices, key fobs, wearables, and other devices allow individuals to swipe their cards or mobile devices through POS terminals to make secure payments.  When the card is brought close, the contactless payment terminal sends a signal, activating the NFC chip embedded in the card, which responds with a unique identification number (ID) and transaction information. This transaction information cannot be reused, preventing it from being used by cybercriminals.

However, in late 2022, Prilex's developers updated the malware with code that blocks contactless transactions, which results in the terminal prompting the buyer to insert their credit card in the device. This makes malware able to read the data coming from the transaction and causes money theft. Thus, the update in code by cybercriminals may cause cybercrimes while using NFC technology. This will hamper the adoption of NFC systems for contactless payments and, in turn, will negatively impact the market in focus during the forecast period.

Customer Landscape

The report includes the adoption lifecycle of the market research and growth, covering from the innovator’s stage to the laggard’s stage. It focuses on adoption rates in different regions based on penetration. Furthermore, the report also includes key purchase criteria and drivers of price sensitivity to help companies evaluate and develop their growth strategies.

Global Market Customer Landscape

Who are the Major Market companies?

Companies are implementing various strategies, such as strategic alliances, partnerships, mergers and acquisitions, geographical expansion, and product/service launches, to enhance their presence in the market.

Nordic Semiconductor ASA: The company offers NFC systems such as UHF band RFID, HF band RFID. Also, the company offers cellular IoT wireless technologies and connectivity devices.

The report also includes detailed analyses of the competitive landscape of the market and information about 15 market companies, including:

• ASSA ABLOY AB
• Avery Dennison Corp.
• Broadcom Inc.
• Intel Corp.
• KISI Inc.
• MagTek Inc.
• Murata Manufacturing Co. Ltd.
• NXP Semiconductors NV
• Qualcomm Inc.
• Samsung Electronics Co. Ltd.
• Sony Group Corp.
• STMicroelectronics NV
• Texas Instruments Inc.
• The Swatch Group Ltd.

Qualitative and quantitative market growth analysis of companies has been conducted to help clients understand the wider business environment as well as the strengths and weaknesses of key market players. Data is qualitatively analyzed to categorize companies as pure play, category-focused, industry-focused, and diversified; it is quantitatively analyzed to categorize companies as dominant, leading, strong, tentative, and weak.

What is the Fastest-Growing Segment in the Market?

The market share growth by the retail segment will be significant during the forecast period. The retail industry uses the NFC system to manage inventory, assets, and supply chains. Factors such as high customer satisfaction and better inventory control have prompted large retailers such as, Amazon and Flipkart, to mandate the use of NFC systems in their warehouses. This has boosted the revenue of the global market in the retail segment. 

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The retail segment was valued at USD 6.17 billion in 2018. The emergence of unmanned retail stores and self-checkout stores will increase the adoption of NFC systems in the retail sector during the forecast period. The adoption of smartphones by individual users has led to the adoption of self-checkout processes that reduce the time it takes to complete the payment process. In the self-checkout process, once payment is made through a payment gateway, the NFC tag is deactivated and the consumer is allowed to leave the store. High customer satisfaction and better NFC systems will lead to greater acceptance of NFC systems in retail stores. In addition, companies such as NXP Semiconductors offer NFC systems such as NFC tags for retail. Hence, all these factors drive the segment and, thus the market to watch during the forecast period.  

Which are the Key Regions for the Market?

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APAC is estimated to contribute 38% to the growth of the global market during the forecast period. Technavio’s analysts have elaborately explained the regional market trends and analysis and drivers that shape the market during the forecast period. NFC, or Near Field Communication, systems utilize electromagnetic radio fields to facilitate wireless transactions between compatible devices. These systems incorporate NFC chips, which enable the exchange of data and initiate actions when devices are brought within a distance of approximately 4 inches. NFC technology has gained popularity as a convenient payment method, enabling contactless transactions at retail outlets and online. However, human error, such as pocket dialing or inadvertent activations, can pose challenges. NFC technology also offers innovative applications, such as smart posters that trigger actions when scanned, enhancing consumer engagement. The battery life of NFC-enabled devices is a consideration, as frequent use of the technology may impact battery performance. Overall, NFC systems offer a seamless and convenient means of conducting transactions and interacting with digital content.  

Segment Overview

The market research report provides comprehensive data (region wise segment analysis), with forecasts and estimates in "USD Billion" for the period 2024 to 2028, as well as historical data from 2018 to 2022 for the following segments.

• Application Outlook 
  • Retail
  • Automotive
  • Transportation
  • Banking and Finance and Others
• Product Outlook 
  • NFC readers
  • NFC chips
  • NFC tags
  • Others
• Region Outlook 
  • North America
    • The U.S.
    • Canada
  • Europe
    • U.K.
    • Germany
    • France
    • Rest of Europe
  • APAC
    • China
    • India
  • South America
    • Chile
    • Argentina
    • Brazil
  • Middle East & Africa
    • Saudi Arabia
    • South Africa
    • Rest of the Middle East & Africa

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Market Analyst Overview

Near Field Communication (NFC) systems refer to short-range wireless technology that enables electronic devices to establish communication between compatible devices. NFC systems consist of a transmitting device and a receiving device, with the former used to initiate the connection. Passive NFC devices, such as cards and tags, do not require a power source and rely on the energy from the transmitting device to function. Active NFC devices, like smartphones, have their own power source. NFC technology is widely used in various applications, including contactless transactions, data exchange, and access control. Smartphones have become the most common NFC-enabled devices, with card readers, public transport systems, and touch payment terminals being some of the common receiving devices.

In addition, NFC systems use inductive coupling and electromagnetic coils for data transfer. NFC systems offer several advantages, including simplified setup, peer-to-peer mode, and convenient transactions. However, they have some limitations, such as power consumption, range, and data transfer speed. NFC systems can also be used for file transfers and mobile payments through services like Samsung Pay, Android Pay, and Apple Pay. The criteria for using NFC systems include data transfer, access control, smart pairing, and enhanced security. Overall, NFC systems provide easy connectivity and compatibility, making them a versatile technology for various applications.

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What are the Key Data Covered in this Market Research Report?

• CAGR of the market during the forecast period
• Detailed information on factors that will drive the growth of the market between 2024 and 2028
• Precise estimation of the market size and its contribution to the market in focus on the parent market
• Accurate predictions about upcoming market growth and trends and changes in consumer behavior
• Growth of the market across North America, APAC, Europe, South America, and Middle East and Africa
• Thorough market growth and forecasting analysis of the market’s competitive landscape and detailed information about companies
• Comprehensive market analysis and report of factors that will challenge the growth of companies

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