141 mn people to use mobiles for payments: Gartner

July 21st, 2011 - 6:05 pm ICT by IANS  

New Delhi, July 21 (IANS) Worldwide, 141.1 million people will use mobile phones as the preferred means of paying their dues this year against 102.1 million in 2010, a study by research and advisory firm Gartner said Thursday.

This is a 38.2 percent increase from last year, the study said.

According to the study, the worldwide mobile payment volume would be $86.1 billion, up 75.9 percent from $48.9 billion in 2010.

However, despite these strong growth projections, the study pointed out that the growth of the mobile payment market is 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 Gartner research director Sandy Shen.

“While developing markets have favourable 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,” she added.

The study said that in developed markets, companies are trumpeting the prospects of Near Field Communication (NFC) without realizing the complexity of the service model.

NFC technology allows customers to quickly purchase products and transfer secure information by touch devices.

“We believe mass market adoption of NFC payments is at least four years away,” Shen added. “The biggest hurdle is the need to change user behaviour by convincing consumers to pay with mobile phones instead of cash and cards.”

The study highlighted that short message service (SMS) and unstructured supplementary service data (USSD) will remain the dominant access technologies in developing markets due to the constraints of mobile phones.

USSD technology is used to communicate with the service provider’s computers in Global System for Mobile communication (GSM). It can be used for internet browsing, mobile-money and location-based content services.

Wireless Application Protocol (WAP), a mobile-enabled browsing platform, will remain the preferred mobile access technology in developed markets, where mobile internet is commonly available and activated on the phone.

Mobile application downloads and mobile commerce are the main drivers of WAP payments, and WAP will account for almost 90 percent of all mobile transactions in North America and about 70 percent in western Europe in 2011, the study said.

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