Global mobile payment users to surpass 141.1 million in 2011: Gartner

21 Jul 2011

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Global mobile payment users will surpass 141.1 million in 2011, a 38.2-per cent increase from 102.1 million in 2010, and mobile payment volumes are forecast to rise 75.9 per cent to $86.1 billion from $48.9 billion

A new report by technology research firm Gartner says that this rise would occur even though the mobile payment market is growing slower than expected.
  
''In developing markets, despite favourable 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 Sandy Shen, research director at Gartner.
  
"While developing markets have favourable 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,'' she said.
  
"In developed markets, companies are trumpeting the prospects of Near Field Communication (NFC) without realising the complexity of the service model. We believe mass market adoption of NFC payments is at least four years away," Shen said.
  
"The biggest hurdle is the need to change user behaviour by convincing consumers to pay with mobile phones instead of cash and cards," she added.
  
Gartner expects 'short message service; (SMS) and 'unstructured supplementary service data' (USSD) to remain the dominant access technologies in developing markets due to the constraints of mobile phones.
  
Wireless Application Protocol (WAP) will remain the preferred mobile access technology in developed markets, where the mobile internet is commonly available and activated on the phone.
  
Mobile app downloads and mobile commerce are the main drivers of WAP payments, and WAP will account for almost 90 per cent of all mobile transactions in North America and about 70 per cent in Western Europe in 2011.
  
Money transfers and prepaid top-ups will drive transaction volumes in developing markets. These are seen as "killer apps" in developing markets, where people value the convenience of sending money to relatives and topping up mobile accounts.
  
This is most obvious in Eastern Europe, the Middle East and Africa, where these two services will account for 54 percent and 32 percent of all transactions in 2011.
  
"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," Shen said.
  
"We predict that in 2011, merchandise purchases will account for 90 per cent and 77 per cent of all transactions in North America and Western Europe, respectively."

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