Apple Pay and HCE could prompt operators to withdraw from NFC

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Apple's entry into NFC will help fuel a more than fivefold increase in the number of users of the technology by 2020, but operators could find themselves on the outside looking in, new research has claimed.

A report by Juniper Research has forecast that there will be 516 million NFC users at the end of 2019, up from 101 million this year.

Growth will also be fuelled by NFC services that use host card emulation, where account details are stored securely on the cloud, instead of on the secure element of the SIM, which is the traditional method of operator enabled NFC.

The report highlighted existing payment services from the likes of BBVA and Bankinter in Spain, and CUA in Australia, with forthcoming products expected in Russia and New Zealand.

The research firm said Apple's entry and growing appetite for HCE-derived services spell bad news for operators, who could be cut out of the ecosystem entirely. On the latest models of the iPhone, the secure element is embedded onto the smartphone itself and controlled by Apple. 

Report author Windsor Holden commented: "We would envisage that while NFC deployments and consumer activity will be buoyed by these developments, the opportunities for network operator involvement are limited. Hence we are likely to see more operators re-evaluating their existing commitments to NFC and possibly withdrawing from the space."

Apple brought NFC functionality to its new iPhone 6 and iPhone 6 Plus models, after years of speculation. The manufacturer's CEO Tim Cook told delegates at the WSJD event last night that the company activated one million cards within three days of the handsets going on sale.

However, the service has been snubbed by the American chemist chains CVS and Rite Aid, who are developing their own mobile payments service.

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