Mobile payments will surpass 141.1 million users worldwide this year, a 38.2% increase from 102.1 million users in 2010, according to Gartner estimates released July 21. Worldwide mobile payment sales volume is forecast to total $86.1 billion, up 75.9% from 2010 volume of $48.9 billion.
These numbers are conservative compared with other analyst forecasts. Juniper Research has estimated the number of mobile-phone users making payments for digital goods to reach 1.8 billion in 2011 and 2.5 billion by 2015, while mobile payments for digital and physical goods, funds transfers and NFC transactions will reach $670 billion by 2015, up 179% from $240 billion in 2001 (
Gartner analysts contend the mobile-payments market is growing slower than expected.
“In developing markets, despite favorable conditions for mobile payment, growth is not as strong as was anticipated,” Sandy Shen, Gartner research director, said in a press release. “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, that does guarantee 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 without realizing the complexity of the service model,” Shen said. “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, she said.
Gartner expects Short Message Service and Unstructured Supplementary Service Data (a protocol used by GSM cellular telephones to communicate with the service provider’s computers) to remain the dominant access technologies in developing markets because of the constraints of mobile phones. Wireless Application Protocol 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% of all mobile transactions in North America and about 70% in Western Europe in 2011.
Funds transfers and prepaid top-ups will drive transaction volume in developing markets, according to Gartner. These are seen as the “killer apps” in developing markets, where consumers value the convenience of sending funds 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% and 32% of all transactions respectively 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% and 77% of all transactions in North America and Western Europe, respectively.”
