The race to develop mobile payment services has resulted in a fragmented marketplace with different technologies and business models. This is further complicated by difficult task of regulating the emerging mobile payments space.

A number of countries have begun enacting regulatory frameworks with a key goal of encouraging interoperability among the various providers as a means to lower costs and ensure widespread adoption of mobile payments.

Industry participants counter that this strategy removes competitive advantages and discourages innovation.

"Global Mobile Payments Regulations: Hoping for Technology Standardization," a new research note from Mercator Advisory Group, reviews current and proposed mobile payments regulation around the world.

The report sizes the market, outlines two different general approaches to regulation, and presents examples of each. It also describes three business models for interoperability between mobile network operators and financial institutions, and analyzes their advantages and disadvantages.

"To date, very few countries around the world have opted to create the initial regulatory frameworks required to oversee the emergence of mobile payments. This is in part because of different regulatory attitudes among countries, but a more significant factor is the fact that the mobile payment and the technology powering it are still evolving," said Tristan Hugo-Webb, associate director of the international advisory service at Mercator and the author of the note.

Highlights of the report include:

• a global overview of mobile payments potential today and in the future;
• a review of mobile payments regulation around the world;
• insight into the argument for interoperability;
• business models employed or under consideration around the world; and
• a case study of direct connectivity to ACH.

One of 10 exhibits in the 23-page report: