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2016: Death of the wallet as NFC tap-cash arrives at last

Or is it 2014? Analysts bicker over e-cash future

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Forrester research reckons 2016 will be the year when electronic cash takes off, thanks to PayPal, but over at ABI they're saying 2014 will see Google Wallet filling virtual pockets.

Forrester's research is based on conversations with 10 "senior executives", while the ABI prediction comes from its "Mobile Wallet Strategies" advice to companies on how to cope with the forthcoming change to our pockets' change. Everyone agrees the wireless payment revolution is coming and cash will go electronic – they only disagree on when it will happen and who will end up controlling our electronic wallets.

It's happy coincidence that Forrester's research, which was funded by PayPal, predicts a later date for users to start paying with a wave of the phone in abundance. PayPal doesn’t have an offering in the space so could do with the time. In America it's using existing phone technology for its cloud-based payment service, which is also available in the UK – but only at PizzaExpress.

The 2016 start date should give companies time to embrace Near-Field Communications (NFC) payments that allow for secure communication between the phone and the reader, without involving the cloud.

Google Wallet, meanwhile, is already in use and making payments, and ABI predicts that Apple will enter the game next year altering the field of play significantly. ABI reckons that's very bad news for the network operators, who still want ownership of the electronic wallet even if they've relinquished dreams of owning the payment mechanisms too.

Here at The Reg we've already bought cookies with a wave of an Orange Quick Tap handset, but while ABI reckons mobile operators will own 75 per cent of the electronic wallets next year, the company also predicts that number will drop to 63 per cent by 2016. That's assuming Google Wallet, and Apple's offering, start to eat into the market.

Apple's entry, if it comes next year, will be a significant deal, but so too will be the London Olympics. Visa is sponsoring the games, and will be launching a special handset with Samsung geared around its PayWave (NFC-compatible) platform. So expect to see everything in the games (with the exception of the tickets) using PayWave transactions and NFC security.

That could have a significant impact, as shoppers are reluctant to use pay-by-wave until they've seen someone else doing it. PayPal would like 2016 to be the year we all give up on our cash, as Forrester predicts, but if we're prepared to sell our souls to Google, Apple or our network operators (rather than PayPal) then it could happen a good deal sooner. ®

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