China, along with India, has emerged as one of the world's five most attractive mobile payment (m-payment) markets though competition is increasing to grab a larger share in the $280 billion sector.
A report released by Arthur D Little (ADL), a global management consulting firm, evaluating the current market conditions for mobile financial services in M-BRIC countries (Mexico, Brazil, Russia, India and China) has recommend potential players to enter these market immediately.
While only 32 million people in M-BRIC currently use mobile financial services, the firm projects that this number will increase to 290 million users by 2015, accounting for 10 per cent of their population.
These users are expected to conduct a total of 20 billion transactions in 2015, with 6.9 billion in China, the report said.
The report said that as mobile financial services are experiencing a global surge, the world's total m-payment transaction volume is to reach approximately USD 280 billion by 2015.
"In M-BRIC countries, there is a substantial base of people on a low income spread across vast distances who own mobile phones and require banking services," Thomas Kuruvilla, Managing Director, Arthur D Little Middle East, said.
"By bringing these two factors together, service providers can meet the need for a more extensive payment distribution network, especially in rural areas," he added.
In India, m-payments will be bank-led, with banks offering this service to regions where ATMs and branches are not in reasonable distance. Over the next two years, players should focus their attention on top-ups and bill payments services.
China's mobile phone users topped 800 million in the first half of 2010 and despite such a high mobile penetration, China's mobile payments are still in their infancy, and competition in the market is already intense, China Daily reported.
A variety of players, such as mobile network organisers, independent service providers and banks, have already deployed a variety of technologies.
Competition between telecom operators and banks for a dominant role in the new industry may also thwart the development of mobile payments in China, Cao Fei, an analyst from research firm Analysys International said.
