Mobile payment use is growing slower than initially projected, particularly in emerging markets that are reckoned to be the main adopters of m-payments to date, Gartner figures reveal.
The research firm predicts the value of mobile payments will grow 75.9% year-on-year to $86.1 billion (€59.7 billion) in 2011, as the number of mobile subscribers accessing payment services hits 141.1 million – up 38.2% on 2010.
However, research director Sandy Shen believes the figures could be higher, noting that growth in emerging markets has been lower than expected despite “favorable conditions for mobile payments such as high penetration of mobile devices and low banking penetration,” because carriers have failed to adapt their services to local markets.
Shen is more damning of developed markets, where she believes operators are underestimating the complexity of deploying near-field communication (NFC) technology. “We believe mass market adoption of NFC payments is at least four years away," she notes, adding. “The biggest hurdle is the need to change user behavior by convincing consumers to pay with mobile phones instead of cash and cards."
SMS and USSD services are expected to remain the dominant access technologies in emerging markets due to the rampant use of entry-level mobile phones. In terms of services, the research firm tips money transfers and prepaid top-ups to drive transaction volumes in emerging markets - particularly in Eastern Europe, the Middle East and Africa.
For developed markets, WAP is tipped to remain the mobile access technology of choice, accounting for close to 90% of mobile transactions in North America and 70% in Western Europe through 2011.
Merchandise purchases are expected to form the bulk of transactions in North America and Western Europe (90% and 77% respectively) due to the success of mobile application stores and mobile payment promotion efforts from major retailers.