Researchers agree – mobile payments set to boom!
Research from two separate analysts confirm expectations that mobile payments are set for a boom time in the next few years.
Garner predictions the number of people using their mobile phones to make payments is set to grow from 70.2 million in 2009 to 108.6 million this year, a 54.5% rise.
Research company IMS says that the number of mobile wallet users is forecast to reach 800 million in 2015.
The Gartner figures suggest that 2.1% of all mobile users will be making mobile payments by 2015, with the fastest take-up of the technology witnessed in developing markets such as Asia, Eastern Europe, the Middle East and Africa, driven by the unbanked and underbanked.
In Asia Pacific, m-payment users will surpass 62.8 million in 2010 and represent 2.6% of all mobile owners. In Europe, the Middle East and Africa there will be 27.1 million while in North America the figure is expected to be just 3.5 million, or 1.1% of all mobile users in the region.
SMS remains the dominant mobile payment technology, says Gartner, because of its ubiquity and ease of use although Web and app-based systems gaining some ground in developing markets. However NFC technology has failed to take off, with many banks seeing no business case.
According to IMS research analyst, Don Tait, “Over The Air (OTA) transactions including remittances, international transfers and remote payments is estimated to be the most commonly used mobile wallet application in 2010.
For OTA solutions, growth is primarily driven by those markets with a lower use of broadband Internet banking or of conventional banking services, and a higher level of migrant workers.
Locations include India, Mexico, the Philippines, the Middle East and much of Africa. However, this application is not confined to these regions; IMS Research expects to see uptake of these services in mature economies, principally as peer-to-peer transfers and for completion of on-line mobile handset purchases.”
“The number of mobile contactless payment users is also projected to increase quickly in the next five years. This growth mirrors that projected for the deployment of NFC, which in mature economies will help drive uptake of mobile banking and other payment services.”
Tait continues, “A high proportion of the growth in mobile wallet users is projected to occur in “unbanked” African and Asian countries during the next five years. Such users will be able to use the mobile wallet as a method of payment for goods and services without having to setup a bank account.
“In line with the adoption of the mobile wallet as a method of payment in unbanked countries, it is not surprising that SMS dominated the number of transactions in 2009 with around 70% of the total. In 2015, SMS is forecast to grow to 140 billion transactions.”
Sandy Shen, research director, Gartner, said: “Developing markets have found the right formula for mobile money services – functions that users want and an ecosystem that can sustain the service. The answer for developed markets, however, remains elusive. The offerings for developed markets will take a different format. Instead of a point offering for mobile payment, the service needs to be built on top of the existing payment behaviour and infrastructure so that users can choose any channel – retail, phone, online or mobile – that suits their context at the moment of payment.”
In a separate report, Juniper Research, which is inevitably one of the most optimistic of te analysts, suggests that the number of mobile subscribers who use their phones for mobile banking will exceed 400 million globally by 2013.