Mobile payment volume to increase by 75.9%.
About 141.1 million mobile users worldwide will use their device as the modus operandi for payments, according Gartner.
The firm has calculated an increase in mobile payment volume for this year, with figures ballooning up to $86.1 billion from 2010′s $48.9 billion – a 75.9% increase.
However, despite the impressive numbers, Gartner believes mobile payment is growing at a much slower pace than expected.
“In developing markets, despite favorable 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 favorable 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.”
“In developed markets, companies are trumpeting the prospects of Near Field Communication (NFC) without realizing the complexity of the service model. We believe mass market adoption of NFC payments is at least four years away,” Ms. Shen said. “The biggest hurdle is the need to change user behavior by convincing consumers to pay with mobile phones instead of cash and cards.”
Money transfers and prepaid top-ups will be the “killer apps” that will drive mobile payment in developing countries like Eastern Europe, the Middle East and Africa. These two services, the firm believes, will account for 54% and 32% 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,” Ms. Shen said. “We predict that in 2011, merchandise purchases will account for 90 percent and 77 percent of all transactions in North America and Western Europe, respectively.”
Full report available here.