MANILA, 4 JUNE 2009 - IT research and advisory firm Gartner predicted that the number of mobile payment users will reach more than 190 million in 2012, representing more than 3% of total mobile users worldwide attaining the "mainstream" level.
Mobile payment refers to the paying for a product or service using mobile technology such as a short message service (SMS), Wireless Application Protocol (WAP), Unstructured Supplementary Service Data (USSD) and NFC. It includes transactions that use banking instruments such as cash, bank accounts or debit and credit cards, as well as noncarrier stored value accounts, such as travel cards, gift cards or Paypal.
However, mobile payment does not include transactions that use mobile operators' billing systems, such as purchase of mobile content or telebanking by mobile to the service center via an interactive voice response (IVR) system.
According to Gartner, the mobile payment industry will continue to experience steady growth and is expected to increase 70 per cent in 2009 or a total of total 73.4 million users. The figure is up 70.4 per cent from 2008 when there were only 43.1 million users.
Sandy Shen, research director at Gartner, said the forecast is based on the momentum in the mobile payment market gathered last year. Examples are the number of high-profile launches of mobile money transfer services in multiple markets, participation of major global institutions in near-field communication (NFC) payment trials, as well as new payment solutions entering the market.
Yet despite the positive projections, Shen noted security concerns, an inadequate "ecosystem" and undefined areas in banking regulations remain as challenges for mobile payment.
"Mobile payment has very different user cases and impact on developing markets to that of developed markets," Shen said. "In developing markets, together with mobile banking, it allows people to use financial services in a more-efficient way -- and sometimes the only way -- at more-affordable costs, and can greatly improve standards of living. In developed markets, mobile is more of an extension of the existing payment infrastructure that allows people to deal with their financial needs on the go and in a timely fashion."
The disparity, she explained, leads to the presence of different products in different markets. For instance, many services in the US rely on a full browser and credit card, but this won't work in developing markets, as many people don't even have a bank account or bank card.
However, Shen said USSD banking would not be acceptable in the US as mobile operators have never made use of this for customer services and users may find it very awkward to work with.
And in terms of both number of users and transaction volumes, Gartner expects Asia-Pacific and Japan to maintain a larger share of the market through 2012. While mobile payment penetration in Western Europe is expected to rise from 0.9 per cent in 2009 to 2.5 per cent in 2012, and from 1.7 per cent to 3 per cent in North America; penetration in Asia-Pacific and Japan will rise from 2 per cent in 2009 to 3.8 per cent in 2012. Mobile payment penetration in Eastern Europe, the Middle East and Africa (EMEA) and Latin America is also expected to exceed 3 per cent by 2012.
