The number of mobile payment users around the world will exceed 141.1 million this year, a 38% increase from 2010, according to new research from Gartner. In addition, the total volume of worldwide mobile payments is forecast to exceed $86 billion (around £53 billion), up more than 75% from last year’s figure.
Despite these projected increases, Gartner doesn’t think the mobile payment market is growing as quickly as expected.
Sandy Shen, research director at Gartner, said “In developing markets, despite favorable conditions for mobile payment, growth is not as strong as was anticipated. Many service providers are yet to adapt their strategies to local requirements, and success models from Kenya and the Philippines are unlikely to be translated to other markets. While developing markets have favorable conditions for mobile payments, such as high penetration of mobile devices and low banking penetration, this is no guarantee of success, unless service providers adapt their strategies to local market requirements. In developed markets, companies are trumpeting the prospects of Near Field Communication (NFC) without realizing the complexity of the service model. We believe mass market adoption of NFC payments is at least four years away. The biggest hurdle is the need to change user behavior by convincing consumers to pay with mobile phones instead of cash and cards.”
Wireless Application Protocol is expected to remain the preferred mobile access technology in developed markets, while the Short Message Service and Unstructured Supplementary Service Data (USSD) are likely to remain the dominant access technologies in developing markets. WAP will account for almost 90% of all mobile transactions in North America and about 70% in Western Europe in 2011, while money transfers and prepaid top-ups will drive transaction volumes in developing markets.
This year, Gartner expects merchandise purchases to account for 90% of all mobile transactions in North America and 77% of transactions in Western Europe.