The NFC Forum’s Latest Usage and Adoption Survey Conducted by ABI Research Reveals Growing Reliance on Mobile Payment Wallets and Priorities for Future Innovation

By Andrew Zignani | 2Q 2024 | IN-7279

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Over the last five years, ABI Research, in partnership with the NFC Forum, has conducted three consumer surveys with the goal of providing a deeper understanding of consumer adoption, familiarity, and experiences with Near Field Communication (NFC)/contactless technology on both global and regional levels. Published in 2020, 2022, and now 2024, the surveys have demonstrated how attitudes toward NFC have changed over time, shown how adoption has shifted across different solutions, highlighted challenges faced by users of the technology, and provided increasing insight into innovative NFC user experiences, use cases, and technical innovation, as well as perceptions versus competitive technologies, in mobile payment applications and beyond. With over 2,600 respondents across 9 countries, the survey captures users of NFC technology and terminates those who have never used a mobile or smartwatch payment. In total, 82% of respondents globally had used one of these methods to make a contactless payment. By region, this represented 89% of respondents in the United States, 83% in China, 81% in Japan, 80% in Europe, and 79% in South Korea.

Some of the most notable findings from the 2024 survey include the following:

Increasing Shift to Digital Payment User Experiences: In the 2022 survey results, 53% of respondents preferred contactless payment cards, while digital solutions such as smartphones (33%) and smartwatches (14%) accounted for 47% combined. In 2024, the majority (55%) now prefer digital solutions, with a 6% increase in the preference for smartphone and 2% for smartwatches. While this shift is ongoing, it is still clear that contactless cards are going nowhere, and users will continue to utilize both technologies. Part of this is likely due to familiarity with cards and several years of experience that it will work.

NFC Contactless Mobile and Smartwatch Payments Are Viewed as the Most Secure, Convenient, Reliable, and Easy to Use Method of Payment: Backing up the first takeaway, 38% of respondents ranked NFC mobile and smartwatch payments as the most secure, 39% of respondents the most convenient, 31% the most reliable, and 42% the easiest to use solution when compared to QR codes, contactless card payments, and even cash. A positive takeaway from a reliability perspective is that both the NFC wallet and contactless card are preferred over QR codes. Meanwhile, the results also re-emphasize the growing shift to convenient and easy to use digital solutions over physical approaches, and that there is also a strong security, convenience, and ease of use message for NFC mobile wallets thanks to the inherent additional security of smartphone/smartwatch solutions via biometrics. As for cash ranking last, this is most likely due to it being no longer accepted everywhere in the post-pandemic world, less convenient to carry, easier to lose, and the additional fears over personal safety when carrying large amounts of cash.

The Frequency of Use for Contactless Technology Has Grown Tremendously: While for payment cards and smartphone wallets, the majority (43% and 40%) of respondents use them multiple times per week, daily usage is up significantly compared to the 2022 survey. In 2022, 15% of respondents used one of these solutions daily, while 30% of payment card users and 27% of smartphone users use it daily in the 2024 survey.

People Are Becoming More Reliant on Mobile Wallets: Not only are people using their NFC payment wallets more often, but they are also now beginning to rely on them more frequently. Among the respondents, 95% have left their physical wallet or purse at home in favor of taking a mobile payment wallet solution at least once, while in terms of frequency, 17% of respondents do this on a daily basis, 36% do this multiple times per week, 31% do this multiple times per month, and 11% do this rarely. However, it also shows that people are still hesitant to leave their physical wallets at home at all times, and prefer to have an alternative payment solution available, whether cash or card. This may also reflect the fact that there are many card-based solutions (e.g., loyalty cards, coupons, tickets) that still do not currently have an NFC solution.

Multi-Purpose Tap and Sustainability at the Forefront of Consumer Demands for Future NFC Innovation: The most common future innovation ranked in the top 3 among respondents was the ability to complete multiple actions via a single NFC tap (e.g., pay for an item, receive a digital receipt, and collect loyalty points all at once), with 63% of respondents selecting this. In second place came NFC being embedded in more products for recycling/sustainability information (60%), while the ability to provide other additional product information (55%) came in third. In positive news, this aligns well with some of the key incentives from the NFC Forum's 5-year technology roadmap, unveiled in 2023. This confirms the desire for streamlining the payment, loyalty, and membership process into a single action, alongside the continued need to embed NFC tags in mainstream consumer products and mass market goods for sustainability efforts and additional product information.

The survey also highlighted some additional findings and potential areas of improvement for NFC technology.

First, in terms of user experience, customer satisfaction with payment-related applications is extremely high. The most common user experience rating of using a mobile wallet was 4/5, with 45% of respondents choosing this option, while 29% of respondents rated the experience as 5/5 (very positive)-this is an increase from 24% in the 2022 survey. This represents a significant increase in positivity when compared to previous surveys (83% in 2022 and 88% in 2020, and could represent the growing familiarity and improvements in user experience post pandemic, as well as longer term usage. However, this experience needs to be replicated within other emerging NFC mobile wallet applications, and the positive mobile payment experience should be the benchmark against which new applications are measured.

However, there are still some lingering issues when using a mobile payment wallet. The most frequently reported issue was multiple attempts to respond when tapping, with 20% of respondents experiencing this frequently. This was followed by slow to respond (18%) and adding card to the wallet (17%). This aligns very closely with the 2022 survey with multiple attempts to respond (38%), error messages (25%), and slow to respond (23%) the most common issues, suggesting there is still some work that needs to be done to improve the user experience and seamlessness of the technology.

Second, from a safety and security perspective, 71% of respondents are either confident or very confident in the safety and security of mobile payment wallets, growing to 94% when extended to somewhat confident. These results show an improvement from the 2022 survey results, with 91% at least somewhat confident and 9% not confident. This is also more closely aligned with the findings in the 2020 survey. This could suggest more knowledge and experience in the security of the technology as usage has become more common and matured in the years post pandemic. This also correlates with the now 92% of respondents regarding themselves as at least somewhat familiar with NFC contactless technology.

Third, while sustainability is a key consideration for many consumers, and there is broader desire to integrate NFC into more products for additional product information, there is a need to educate brands on the value proposition and Return on Investment (ROI) of integrating NFC to further incentivize adoption. This could be through increased customer engagement and retention, certifying the quality and authenticity of a product, alongside enabling loyalty schemes and innovative location or Augmented Reality (AR)-based interactions. With people willing to leave cash or physical wallets at home, NFC is becoming fundamental in enabling various daily activities. This aligns with the need for multi-action support and enabling additional mobile wallet use cases; for example, users can now leave driver's licenses, IDs, keys, train tickets, coupons, and concert tickets behind or be fully digitized. This shift from physical to digital wallets will continue to accelerate in the coming years, and the strong desire for multiple actions to combine payments and other mobile wallet functionality, such as loyalty schemes, discount codes, and receipts, will enable users to be even less reliant on physical solutions over time.

Finally, mobile wallets are more than just NFC, although this is the foundational technology, and other technologies (e.g., QR codes, barcodes, and one-time passcodes) are now becoming increasingly complementary. The perception of mobile wallets is now more closely tied to security, rather than a specific contactless technology, enabling multiple use cases beyond payments. A summary of the findings can be found on the NFC Forum website.