The NFC market size is expected to reach 640.5 billion yuan by 2023

According to market research reports, it is expected that the entire near field communication application market will reach 640.5 billion yuan by 2023.

Near Field Communication (NFC) is a set of standards for smartphones and similar devices to establish radio communications by touching each other or bringing them into close proximity (usually no more than a few centimeters). Current and expected applications include contactless transactions, data exchange, and some simple communications between complex devices, such as communication between NFC devices and passive NFC chips, which we call "tags."

SONY speakers using NFC technology to pair with Bluetooth

Both NFC and Bluetooth are short-range communication technologies integrated into mobile phones. NFC operates slower than Bluetooth but consumes much less power and does not require pairing.

Regarding NFC we can trace it back to radio frequency identification technology or RFID technology. RFID Readers can send radio waves to passive electronic tags for identification and tracking of electronic tags.

NFC technology enables users to make cashless payments using their mobile phones. Mobile payment is the main factor driving the NFC market, and the NFC mobile payment market is expected to cannibalize the smart card payment market. Currently, security and lack of standardization are two major issues related to this market. NFC technology is not completely secure, so payments through NFC devices have certain limitations.

The NFC market includes products such as NFC chips, tags, readers, NFC-based micro SD cards and NFC-enabled SIM/UICC cards. The NFC product market is a highly fragmented market, with each segment reflecting different trends. For example, the NFC chip market is currently an almost monopoly market, with NXP Semiconductors occupying more than 80% of the market share, while the NFC Tag market is a highly fragmented market with many participants and fierce competition. As the number of mobile devices integrating NFC technology is increasing rapidly, the market for NFC-based SIM/UICC cards and Micro SD cards cannot meet expectations and may eventually be eliminated.

Mobile payment is undoubtedly the most attractive application of NFC technology. It includes in-Store and online payments. The near field communication market is expected to erode the smart card market for cashless payments. Especially in recent years, various mobile phone manufacturers have added NFC functions to their devices and launched mobile payment functions based on this technology, such as Apple Inc. Pay, Samsung Pay of Samsung Electronics, Huawei Pay of Huawei Communications, etc. Now domestic consumers can easily use the NFC function of their mobile phones to make quick and convenient mobile payments in stores.

Other major applications of NFC technology are Access Control, tickets, anti-counterfeiting traceability applications for high-value products, data sharing and advertising. The application of NFC technology is also indispensable in community access control management. Quick entry and exit can be achieved by simply sensing the NFC access control card. Tickets for various concerts also have a built-in NFC chip. This chip is extremely secure and effectively prevents counterfeiting. Anti-counterfeiting and traceability management of various domestic luxury wines, cosmetics, Jewelry, high-end tea, clothing, shoes and bags, etc. are also inseparable from NFC technology. With the diversified development of marketing and advertising forms, NFC technology has also been innovatively applied to consumer terminal information collection and brand promotion. A large number of high-quality NFC technology hardware manufacturers and software developers are also constantly striving to innovate and promote and apply NFC technology to more industries. The growth of the NFC market has broken through one ceiling after another and is developing in a higher and further direction.