Gartner: Mobile payments to grow, but more slowly than expected
In a new report published by research firm Gartner Inc., mobile payments are predicted to see significant gains, but they may not be as big, or come as quickly, as was once expected.
"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," said Gartner Research Director Sandy Shen in a statement.
"In developed markets, companies are trumpeting the prospects of Near Field Communication (NFC) without realizing the complexity of the service model," Shen added. "We believe mass market adoption of NFC payments is at least four years away."
According to Gartner's report, mobile payment users will surpass 141.1 million in 2011, or a 38.2 percent increase from the previous year. The report predicts mobile payment volume globally will reach $86.1 billion, which is an increase of 75.9 percent from 2010.
Gartner said it expects that limitations of mobile devices in emerging markets will mean technologies supported by features phones, such as SMS text messaging, will remain the dominant technology for mobile transactions. It also said Wireless Application Protocol (WAP) will continue to be the technology consumers use to make mobile payments in developed markets, mostly through mobile applications and m-commerce. The report said 90 percent of all mobile transactions in North America and about 70 percent in Western Europe in 2011 will be through WAP.
"Thanks to the success of mobile application stores, such as Apple's App Store, and the efforts in driving mobile sales by major retailers, such as Amazon and eBay, merchandise purchases far outweigh other use cases in developed markets, which include North America and Western Europe," Ms. Shen said in the announcement. Merchandise purchases will account for 90 percent of mobile transactions in North America and 77 percent in Western Europe, Shen said.
In developing markets, person-to-person (P2P) money transfers and "top-ups" to mobile phone accounts will account for most of the growth in transaction volumes in emerging economies. Gartner said this will be especially true in Eastern Europe, the Middle East and Africa, where P2P and mobile top-up will account for 54 percent and 32 percent of all transactions in 2011.