The adoption of NFC (Near Field Communication) and demand from emerging markets will help Asia’s mobile payments market to double in five years, says Frost & Sullivan.
Mobile transactions will rise from $1.6 billion in 2009 to $3.6 billion in 2014, the research firm predicts.
SMS-based payments, which accounted for nearly 82 % of the total last year, will remain the dominant channel until 2015, dropping to about 67%, F&S said. 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.
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.
”NFC will find wide popularity, and quickly too, in developed markets where mobile penetration rates and the use of smart cards for contactless payments are already high, and rallying the supporting infrastructure is relatively easier (than in developing countries),” he said.
But he said the mobile payment value chain was “quite often embattled with issues of which vested party plays the bigger role” and infrastructure interoperability issues between banks, application service providers’ and mobile operators’ platforms.
But m-payments meant new revenue streams for operators, lower cash handling costs for banks and faster transaction times for merchants, he said.
Major payment firms were already providing contactless payment services via mobile phones, while banks are also keen to jump on the NFC bandwagon, Amin noted.
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