141 Million Consumers To Spend $86.1B Using Mobile Payments In 2011, Growing “Slower Than Expected”

In a new report published today by Gartner, the research firm is estimating that mobile payment users worldwide will surpass 141.1 million in 2011, a 38.2 percent increase from 2010, in which mobile payment users reached 102.1 million. According to the research, worldwide mobile payment volume is projected to total $86.1 billion, up 75.9 percent from …   Read More

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In a new report published today by Gartner, the research firm is estimating that mobile payment users worldwide will surpass 141.1 million in 2011, a 38.2 percent increase from 2010, in which mobile payment users reached 102.1 million.

According to the research, worldwide mobile payment volume is projected to total $86.1 billion, up 75.9 percent from 2010 volume of $48.9 billion.  While growth is strong, Gartner analysts claim the mobile payments market is growing “slower than expected.”  Gartner’s projections are modest compared to similar estimates released by Juniper a few weeks ago.

Juniper estimates that the transaction value of mobile payments for digital and physical goods, money transfers and NFC transactions will reach an impressive $670 billion by 2015, up from $240 billion this year.  Gartner says that particularly in developing markets, growth in mobile payments is not as strong as expected.  “While developing markets have favorable conditions for mobile payments, such as high penetration of mobile devices and low banking penetration, this is no guarantee of success, unless service providers adapt their strategies to local market requirements,” said Sandy Shen, research director at Gartner.

According to the report, 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, the Middle East and Africa, where these two services will account for 54% and 32% of all transactions in 2011.

“Thanks to the success of mobile application stores, such as Apple’s App Store, and the efforts in driving mobile sales by major retailers, such as Amazon and eBay, merchandise purchases far outweigh other use cases in developed markets, which include North America and Western Europe,” Ms. Shen said.  “We predict that in 2011, merchandise purchases will account for 90% and 77% of all transactions in North America and Western Europe, respectively.”

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2 comments

  1. Mobile App Developer

    The market is developing countries has the potential to allow mobile payments to explode, but its up to banks and telcos to find strategies in order to tailor their services for this market. What might work in more developed countries may not work, and they have to be keen at this.

    For example, NFC payments might not be easily accepted here given the added expense for NFC terminals. Apps that use SMS to send payments might be a better choice here. Other features other than simple transactions have to be considered as well. How do the parties (specially the unbanked) collect their payments? How can they make the process simpler and more convenient for both retailers and mobile users? What can they do to assure customers that their payments systems are safe? These are questions that need to be answered in order for payments to explode in these markets.

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