Mobile payments levelling off

Mobile payment image

More than 141 million people will use mobile payments around the world by the end of this year, an almost 40 per cent increase on 2010 figures.

The value of mobile payment transactions is also expected to exceed $86 billion (53 billion), according to Gartner.

But the market research firm believes the growth in mobile payments is starting to tail off, especially in developing markets.

Developing nations, such as Kenya and the Philippines, were widely heralded by the mobile industry as best placed to exploit the technology, due to less developed banking infrastructures, but relatively high mobile phone penetration.

"Many service providers haven't yet adapted their strategies to local requirements, and success models from Kenya and the Philippines are unlikely to be translated to other markets," said Sandy Shen, a research director at Gartner.

In developed markets, such as the UK and the US, vendors and mobile operators have been pushing near-field communications as a way to take the hassle out of mobile payments, especially for lower-value transactions.

But Gartner maintains that mass-market penetration for NFC is still four years away. "The biggest hurdle is the need to change user behavior by convincing consumers to pay with mobile phones instead of cash and cards," said Shen.

The market is also likely to develop in different ways, with person to person payments and mobile top ups dominant in developing markets, and "merchandise" purchases which Gartner defines as including eBay and app store transactions the most important in North America and Europe. But payments by text also remain key.