Mobile payment users will surpass 141.1 million in 2011, a 38.2% increase from 2010, when mobile payment users reached 102.1 million worldwide, according to Gartner.
Worldwide mobile payment volume is forecast to total $86.1 billion, up 75.9% from 2010 volume of $48.9 billion. Despite these strong growth projections, Gartner analysts said the mobile payment market is growing slower than expected.
“In developing markets, despite favourable 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 remain the dominant access technologies in developing markets due to the constraints of mobile phones. Wireless Application Protocol (WAP) will remain the preferred mobile access technology in developed markets, where the mobile Internet is commonly available and activated on the phone.
Mobile app downloads and mobile commerce are the main drivers of WAP payments, and WAP will account for almost 90% of all mobile transactions in North America and about 70% in Western Europe in 2011.
"In developed markets, companies are trumpeting the prospects of Near Field Communication (NFC) without realising 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 behaviour by convincing consumers to pay with mobile phones instead of cash and cards," Shen said.
Money transfers and prepaid top-ups will drive transaction volumes in developing markets. These are seen as the "killer apps" in developing markets, where people value the convenience of sending money to relatives and topping up mobile accounts. This is most obvious in Eastern Europe, West Asia and Africa, where these two services will account for 54% and 32% of all transactions in 2011.