The value of mobile payment transactions is forecast to expand 68% annually and reach almost $250 billion in 2012 from $29 billion in 2008. By then, accourding to Arthur D. Little, proximity payments will represent 51% of the total m-payment transactions.
Based on ADL's Global M-Payment Report Update 2009, the company believes these figures will be realized as telecom companies have an incentive to launch m-payment services to take advantage of the current window of opportunity. Additionally, transaction volume is expected to keep rising as m-payments will take market share from banking transactions due to lower service costs, and from online-payment services due to increased mobility.
M-payment services are largely still focused on a business-to-person environment, and are equally balanced between remote and proximity services. Volume-wise, remittances will globally be the strongest growth contributor, rising 25% annually over the next two years, before retail purchases will take the lead with 77% yearly growth until 2012.
A key factor influencing the potential for m-payments in any market - developed or emerging - is the banking infrastructure. M-payments have a greater opportunity in markets where the banking network is relatively less developed, acting as a competitive service channel.
ADL expects m-payment transactions in developed markets to grow 56% yearly, representing a little over a third of the total transaction value by 2012. That same year, emerging markets will grow by 76% yearly and account for about two-thirds of the total.
The biggest share in 2008 came from the cluster of developed countries Japan, South Korea and Australia, with 24% of the global total. Western Europe is in the second spot with a 13% share, but will become the biggest contributor at 17% by 2012. South America will follow closely with 12% and North America with 11%.
In developed markets, ADL does not see m-payments substituting existing payment systems - as massive adoption is limited to convenience-enhancing applications and niche segments - but it will put pressure on existing transaction channel margins. In the next two years, m-payments will remain a complementary transaction channel in developed markets.