Move to m-payment gains momentum

Staff Writer
10 Aug 2009
00:00

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.

Related content

Follow Telecom Asia Sport!
Comments
No Comments Yet! Be the first to share what you think!
This website uses cookies
This provides customers with a personalized experience and increases the efficiency of visiting the site, allowing us to provide the most efficient service. By using the website and accepting the terms of the policy, you consent to the use of cookies in accordance with the terms of this policy.