Near Field Communication Market will grow at highest pace owing to rising smart city and Internet of Things deployment
Near Field Communication Market will grow at highest pace owing to rising smart city and Internet of Things deployment
Blog Article
Near field communication (NFC) refers to a short-range wireless connectivity technology that allows devices to establish radio communication by bringing them into close proximity, usually no more than a few centimeters. The technology enables contactless communication between devices, allowing users to share content, access information, make transactions, and connect electronic devices with a tap or touch. NFC chips are embedded in devices such as smartphones, laptops, electronic tags, credit/debit cards, and transport cards. Rapid proliferation of smartphones, rising adoption of IoT devices, growing demand for contactless payments globally, and increasing smart city projects worldwide have propelled the demand for NFC technology.
The global near field communication market is estimated to be valued at US$ 29.01 Bn in 2024 and is expected to reach US$ 88.42 Bn by 2031, exhibiting a compound annual growth rate (CAGR) of 17.3% from 2024 to 2031.
Key Takeaways
Key players operating in the near field communication market are Broadcom, MediaTek, NXP Semiconductors, Qualcomm, Renesas Electronics, Texas Instruments, Smartrac, STMicroelectronics, Sony, and Toshiba. Rapid digitization and rising demand for contactless payment options is a key factor driving the adoption of near field communication technology globally. Advancements in tech such as NFC-integrated systems on chips that enable multiple payment methods and RFID tags with enhanced data capacities are accelerating the market growth.
Growing demand: Increasing deployment of Near Field Communication Market Demand in various industries such as BFSI, retail, healthcare, automotive and transportation is spurring the demand. The technology is widely being utilized in applications such as contactless payment, access control, ticketing, inventory management, loyalty programs, and product authentication. The surging adoption of smartphones globally is further fueling the NFC chip market.
Technological advancement: Launch of advanced NFC chipsets with improved data transfer speed and security features by industry players is strengthening the technology's footprint. Manufacturers are focused on developing system-on-chips integrated with NFC along with other technologies like Bluetooth and Wi-Fi. This allows devices to perform multiple contactless connectivity and data exchange functions using a single chip.
Market Trends
Integration of NFC in IoT devices: Growing deployment of IoT and connected devices across industries is driving the adoption of NFC technology for contactless data sharing and device configuration. NFC tags or chips are increasingly being embedded in IoT devices, sensors, industrial equipment and appliances to enable wireless programming and interface.
Mobile payments proliferation: Rising penetration of digital payments and e-commerce has propelled the usage of contactless mobile wallets and debit/credit cards with NFC technology. Many retailers, merchants and transit operators now accept contactless payments via NFC-enabled smartphones and cards. This is expected to significantly drive the market over the forecast period.
Market Opportunities
Transportation & ticketing: NFC provides an ideal platform for integrated ticketing across public transport networks. Its deployment for contactless ticketing on buses, metro and trains is expected to gain widespread adoption, especially in developed economies.
IoT & asset tracking: Growing need for real-time tracking of high-value assets, inventory and industrial equipment across industries is paving opportunities for NFC tags. The technology can facilitate wireless data transfer for asset lookups, maintenance logs and product authentication.
Impact of COVID-19 on Near Field Communication Market Growth
The COVID-19 pandemic has significantly impacted the growth of the Near Field Communication (NFC) market. During the initial phase of the pandemic, lockdowns and strict social distancing measures forced businesses to temporarily shut down operations. This led to a decline in demand for NFC technology from industries such as retail, transportation, and financial services.
As the pandemic continued, contactless payments using NFC-enabled devices gained prominence due to hygiene concerns among consumers. Many retailers and merchants adopted contactless payment options at stores to reduce cash transactions. However, supply chain disruptions constrained the production of NFC chips and related components initially. With relaxations in restrictions and vaccination drives in 2021, the NFC market has started recovering.
Going forward, the demand for contactless payments and digital ticketing is expected to remain high even in the post-pandemic era. NFC technology provides a safer and more convenient way for consumers to make transactions and access services without physical contact. Manufacturers are investing in development of advanced NFC solutions to enable new use cases across industries. Strategic partnerships between NFC providers and ecosystem players will be critical for driving further adoption. While global macroeconomic challenges persist, the long-term outlook for the NFC market remains positive.
Asia Pacific Region Dominates the Global NFC Market
The Asia Pacific region currently holds the largest share of the global NFC market in terms of value. Countries such as China, India, Japan and South Korea have seen extensive deployment of NFC technology, especially for mobile payments. China, in particular, has emerged as the global leader in contactless transactions driven by the widespread popularity of platforms like Alipay and WeChat Pay.
Robust economic growth, rising disposable income, growing digitization and smartphone proliferation have boosted the Asia Pacific NFC market size over the last decade. Manufacturers have also increased investments in this region to capitalize on the high-volume opportunities. Going forward, increasing focus on digital transformation across industries is expected to further accelerate NFC adoption across Asia Pacific.
Europe Witnesses Fastest Growth in the NEC Market
Among regions, Europe has witnessed the fastest growth in the NFC market over the past few years. The widespread acceptance of contactless payments using debit and credit cards equipped with NFC technology has been a major growth driver. Countries like the UK, France, Germany, Italy and Spain account for the largest share of the European NFC market.
Favorable government initiatives supporting cashless transactions and rising consumer preference for convenience have led to dynamic growth in the region. Advancing mobile wallet systems and open banking standards are also boosting NFC integration. Overall strong macro indicators, well-developed transportation infrastructure and growing focus on IoT applications present opportunities for continued expansion across Europe. The region is anticipated to emerge as another hotspot for the NFC sector in the coming years.
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About Author:
Alice Mutum is a seasoned senior content editor at Coherent Market Insights, leveraging extensive expertise gained from her previous role as a content writer. With seven years in content development, Alice masterfully employs SEO best practices and cutting-edge digital marketing strategies to craft high-ranking, impactful content. As an editor, she meticulously ensures flawless grammar and punctuation, precise data accuracy, and perfect alignment with audience needs in every research report. Alice's dedication to excellence and her strategic approach to content make her an invaluable asset in the world of market insights.
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