Google Wallet and other mobile payment providers, coupled with Near Field Communcation-enabled smartphones, are stimulating the production of contactless technology in cash registers, says ABI Research. Some 85 percent of Point-of-Sale (PoS) terminals that ship in 2016 will be “contactless-enabled,” up from 10 percent in 2010, says the research firm.

With Google Wallet and other mobile payment services coming to the fore, some analysts expect big things for emerging services that let consumers pay for goods using their smartphones or smart cards.

According to ABI Research, Google Wallet, pictured at right on a Samsung Nexus S 4G smartphone, as well as rival services such as Isis, have created optimism for payments enabled via near field communication (NFC) wireless technology embedded in smartphones. NFC and other contactless technologies enable devices to talk to each other between distances of a few inches.

ABI is forecasting that 85 percent of Point-of-Sale (PoS) terminals that ship worldwide in 2016 will be "contactless-enabled." That's a big leap from the 10 percent of total PoS terminals that shipped with contactless technology in 2010.

The study spotlights Ingenico, VeriFone, and Hypercom as the three leading vendors of PoS terminals, all of which are involved in the Google Wallet initiative. VeriFone recently acquired Hypercom after agreeing to sell Hypercom's U.S. PoS terminal business to Gores Group to quell antitrust concerns from the Justice Department.

According to ABI Senior analyst Craig Foster, contactless technology has the potential to change the way we pay for goods by accelerating check-out times. Just as faster web search leads to more queries performed on search engines from Google and Bing, faster check-out times at retailers lowers a key barrier to consumer purchases.

Unfortunately, there is currently a dearth of NFC-enabled smartphones on the market. Samsung Nexus S smartphones are fitted with a special, secure NFC chip, but other NFC-equipped phones have been slow to reach the market. Google Wallet lets shoppers purchase goods from select retailers from NFC-enabled Samsung Nexus S 4G smartphones from Sprint. The service, which represents the first major tap-and-pay service in the U.S., is launching later this month in New York City and San Francisco.

In a separate initiative, PayPal plans to enable users to tap two Nexus S phones together to let users exchange money in peer-to-peer fashion. The Android-based PayPal app (pictured at right) is due later this summer.

AmEx "Serve" heading for Verizon smarthones and tablets

Last week American Express and Verizon Wireless announced a Serve contactless digital payment platform that will be integrated on Verizon's mobile phones and tablets. Serve blends online, offline and mobile payment options into a single account, funded from a bank account, debit, credit or charge card, or by receiving money from another Serve account.

It is unclear what technology will be required on the mobile devices to make transactions. There appears to be no specific mention of contactless technology on the Serve website.

On Aug. 9 Visa unveiled a plan to coax retailers to install technology in their PoS terminals that processes a card embedded with EMV contact and contactless chip technology. Consumers will complete transactions with a signature or PIN at the point of sale. EMV (Europay, MasterCard and VISA) is a well-established smart card technology.

Then there is Isis, the NFC-based mobile payment platform from carriers AT&T, Verizon, and T-Mobile. Isis is the first mobile payment provider to link all four major credit card providers in the U.S. Isis will test its payment system in Salt Lake City, Utah, and Austin, Texas, in the first half of 2012.

There is a lot at stake in mobile payments. A recent Gartner study projects worldwide mobile payment users will surpass 141.1 million in 2011, with mobile payment volume expected to top $86.1 billion around the globe.

Availability

The ABI Research report on contactless PoS devices is part of its "Cellular-enabled POS Terminals, ATMs, and Vending Machines" study, due in the third quarter at an undisclosed price.

Clint Boulton is a writer for eWEEK.

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