According to the latest projections from information technology research and advisory company Gartner, worldwide mobile payment users will surpass 141 million in 2011 -- a 38.2-percent increase from 2010, when mobile payment users reached 102.1 million. These growth numbers, although strong, are not as large as Gartner analysts had expected them to be.
Gartner says lagging mobile payment strategies on the part of service providers may be responsible for stalling growth in developing markets. “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," in a statement. "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.”
In the meantime, Gartner expects SMS and USSD to remain the dominant access technologies in developing markets, with money transfers and prepaid top-ups driving transaction volumes. Gartner says that in Eastern Europe, the Middle East and Africa, these two services will account for 54 percent and 32 percent of all transactions in 2011, respectively.
In developed markets, changing consumer behavior may be the biggest challenge to growth, according to Gartner. "Companies are trumpeting the prospects of near-field communication without realizing the complexity of the service model. We believe mass market adoption of NFC payments is at least four years away," Shen said. "The biggest hurdle is the need to change user behavior by convincing consumers to pay with mobile phones instead of cash and cards."
According to Gartner, WAP will continue to be the preferred mobile access technology in developed markets in 2011, and mobile application downloads and merchandise purchases will continue to account for most of the mobile transactions in developed markets. "We predict that in 2011, merchandise purchases will account for 90 percent and 77 percent of all transactions in North America and Western Europe, respectively," said Shen.