Mobile payments market to quadruple in next five years: Study

The value of mobile payments for digital and physical goods, money transfers and near field communications transactions have already reached $170 billion this year. The growth of mobile payments across all market segments is driven by the adoption of smartphones and the increased use of application stores.

“Apps and SMS are currently main drivers,” said Howard Wilcox, senior analyst at Juniper Research, London. “Apps are easy to use and convenient and enable higher-end users to increasingly manage their lives with their mobile devices.

“SMS is ubiquitous and easily understood by the vast majority of the population and especially appropriate for developing countries which might not have such good mobile broadband coverage or smartphones,” he said.

Juniper expects mobile shopping via platforms such as Amazon Mobile to grow significantly over the next five years.

In developing markets SMS-driven money transfer services are the main driver, increasing at a rate of 30 per year.

The top three regions for mobile payments – Far East and China, West Europe and North America – will represent nearly 70 percent of the global mobile payment gross transaction value by 2014.

Vendors, retailers, merchants, content providers, wireless carriers and banks are all actively establishing new services and schemes.

However, in areas such as NFC, greater collaboration is required to establish a widely accepted business model that translates easily into tangible services.

“All main segments, like digital and physical goods purchases, NFC and mobile money transfers will see high growth rates as services experience significant demand from mobile users worldwide,” Mr. Wilcox said. “We forecast that mpayments will account for less than 5 percent of ecommerce transaction value by 2014.

“One reason is that the majority of larger value items such as white goods and cars currently bought via ecommerce are likely to continue to be bought from the larger screen,” he said.