Contactless opportunities 
Despite a wide range of applications, NFC's biggest potential is expected in proximity mobile payment services, as it extends the popularity of contactless cards.
One of the key drivers, obviously, is due to the fact that NFC is compatible with some contactless smart card systems, including Sony's FeliCa and Philip's MiFare, which are widely used across Asia, as well as those developed by leading credit card companies. In China, for instance, public transportation systems in over 100 cities support MiFare smart cards.
Meanwhile, leading credit card issuers like Visa, MasterCard and AMEX are also driving schemes that aim to get consumers to use contactless solutions for low-value cash payments. Such a move, according to the Yankee Group, will increase merchant acceptance and thereby lay the groundwork for more widespread use of mobile phones with contactless capabilities in point-of-sale transactions.
In addition to Nokia, Samsung and BenQ have also announced plans to incorporate NFC into handsets. Samsung introduced a prototype NFC handset (the SGH-X700) at 3GSM in February and started test programs with domestic telecom service providers in South Korea and France. Last month BenQ announced plans to introduce its first NFC-compliant handset in the first half of 2007. BenQ says its first NFC handset sample will be available in the first quarter of 2007 with volume production to follow by the middle of the year. The company will also be testing the functionality of external microSD card and USIM (universal subscriber identity module) applications in Taiwan with Chunghwa Telecom and Taipei Smart Card Corporation (TSCC).
With mobile phones becoming increasingly powerful and consumers' widespread use of electronic payments for more transactions, market watchers are upbeat on the market outlook of mobile payments.
The Yankee Group predicts that global revenue for off-deck mobile payment transactions will rise dramatically during the next few years, increasing from nearly $500 million last year to $1.7 billion in 2009, with the user base expanding from 65.5 million to 178.8 million during the same period.
Another research firm, Strategy Analytics, is more bullish on the market outlook, reckoning that mobile contactless payments will facilitate over $36 billion of worldwide consumer spending by 2011, thanks to the push by leading credit card issuers and handset makers.
Conflict of interest
While the technology and infrastructure are in already in place to make it a reality and a few commercial NFC deployments are expected to launch in the next year, industry players say the most crucial and complex issue around the commercial deployment of NFC mobile payment services is creating a business model that is mutually beneficial to all stakeholders within the NFC ecosystem and appealing to consumers.
Getting all parties to work together is a major challenge because the stakeholders, particularly mobile operators and banking organizations, represent different markets with competing interests, analysts say.
Stuart Carlaw, principal analyst with ABI Research, says mobile operators are still cautious about brining NFC into handsets, partly due to concerns over their control in the new ecosystem and their customers.
'Mobile operators like to control the whole cellular service ecosystem, but contactless payment revenues fall outside that value chain,' he says.