Mobile and wearable contactless payments could hit $95 billion by 2018, with Apple leading the way to help develop the sector, new research has claimed.

According to analysts at Juniper Research, the market for such payments was worth less than $35 billion last year, but recent developments and an increased interest in near-field communications (NFC) technology has given the sector a boost.

However, the report warned that it would take “several years” before wearable technology would reach “critical mass”. It pointed to the nine million Apple Watch devices sold in 2015 compared with millions of new iPhones compatible with NFC.

Apple introduced NFC to the iPhone 6 in 2014, with the intention of using it to facilitate Apple Pay.

Among the other companies that have been experimenting with wearable payment is MasterCard, which has worked with wearable tech firms Ringly and Nymi to develop payments that can be taken through a high-tech ring and a wristband, part of a programme that would enable consumers to make convenient mobile payments through objects or devices, while still retaining a high level of security.

Game-changer

But although the Apple Watch and other wearables have been considered somewhat of a game-changer in the payments sector, it is still early days. Juniper analysts said they did not expect wearables as a whole to account for more than 2 per cent in value terms of non-card contactless payments in 2018.

That leaves NFC-enabled phones picking up much of the slack.

The entrance of Apple into the market with Apple Pay,and Samsung with its own payments system, has also had consequences for mobile operators toying with the idea of moving into mobile payments. The sector had previously been identified as a potential area of growth for telecoms companies, but, according to Juniper, that avenue may already be closing off to firms.

“Apple’s entry into NFC gave the industry a much-needed boost, and could well be seen as the tipping point for the technology, but at the same time it sounded the death knell for the mobile operator projects,” said report co-author Nitin Bhas.

But some are still clinging on. Vodafone offers its digital payments service Vodafone Wallet in the UK – although it has yet to make its way to Ireland.

The latest research comes shortly after Juniper released a report that claimed the transaction value of online, mobile and contactless payments would reach $3.6 trillion in 2016, a 20 per cent rise on the previous year’s figures.

Part of that rise was due to a surge in contactless payments facilitated by the raising of the value limit on transactions.

The company also said it expected cards would account for the majority – more than 90 per cent – of contactless payments in the next five years, but the roll-out of Apple Pay and Samsung Pay would help raise awareness of the possibilities of smartphone payments.

There are more to come. Asian phone brand Xiaomi has filed patents for a payments service, while ZTE and Lenovo are also rolling out embedded secure elements in some of their phones.