The adoption of NFC (Near Field Communication) and demand from emerging markets will help double Asia’s mobile payments market in five years, says Frost & Sullivan.
Revenues from mobile transactions will rise from $1.6 billion (€1.1 billion) in 2009 to $3.6 billion in 2015, after growing at a CAGR of 14.8% between 2010 and 2015, the research firm predicts.
SMS-based payments, which accounted for nearly 82 % of the total last year, will remain the dominant channel until 2015, despite dropping to about 67% of all transactions, while the proportion of NFC payments will grow from 12% to 23%.
Industry analyst Shaker Amin said the adoption of m-banking was increasing rapidly in less-developed mobile markets such as China, India and the Philippines, because of the limited availability of traditional banking services in rural areas.
“Even in emerging markets such as Bangladesh, Pakistan and Sri Lanka - although limited to mostly SMS-based bill payments and micro credit transfers - m-payments are increasingly becoming popular,” he said.
Markets such as Hong Kong, Singapore and Taiwan had shown little interest in m-payments to date, but this would change as a result of NFC, Amin said.
But he noted the mobile payment value chain was “quite often embattled with issues of which vested party plays the bigger role” and infrastructure interoperability problems between banks, application service provider’s and mobile operator’s platforms.
The plus side of the pain is new revenue streams for operators, lower cash handling costs for banks, and faster transaction times for merchants, Amin said.