Analyst firm Gartner predicted that Worldwide mobile payment volume is expected to nearly double to $86.1 billion in 2011 from $48.9 billion in 2010.
Worldwide mobile payment volume is estimated to total $86.1 billion, up 75.9% from 2010 volume of $48.9 billion. In spite of these strong growth projections, Gartner analysts said the mobile payment market is mounting slower than estimated.
“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.
Gartner expects Short Message Service (SMS) and Unstructured Supplementary Service Data (USSD) to stay the leading access technologies in mounting markets due to the limitations of mobile phones. Wireless Application Protocol (WAP) will stay as the favorite mobile access technology in developed markets, where the mobile Internet is usually accessible and activated on the phone.
The main drivers of WAP payments are Mobile app downloads and mobile commerce and WAP will account for almost 90% of all mobile business in North America and about 70% in Western European markets in 2011.
“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. The biggest hurdle is the need to change user behavior by convincing consumers to pay with mobile phones instead of cash and cards,” Shen said.
Money transfers and prepaid top-ups will drive business deals volumes in developing markets. These are seen as the “killer apps” in developing markets, where people give value to the expediency of sending money to relatives and recharging their mobile accounts. This is most noticeable in Eastern Europe, West Asia and Africa, where these two services will account for 54% and 32% of all transactions in 2011.