Global mobile payment transactions are expected to grow 97 per cent per year, over the next three years, reaching a value of £591bn by 2015, according to a new report from KPMG.
The report says that the growth will be fuelled by consumer demand for NFC-enabled (Near Field Communication) devices – Tablets and smartphones able to interact with scanners at the point-of-sale and immediately transfer funds. It will also be driven by consumers’ growing desire to shop in environments that are ‘always on, always fast and always accessible’.
“Growth in the mPayments marketplace will be driven by customers’ increasing need for convenience and the development of a raft of new applications enabling commerce in the palm of our hands,” says David Hodgkinson, senior manager in KPMG’s customer and channel consulting team. “Today, premium SMS dominates mobile payments, but by tomorrow, contactless and cloud-based services will dominate, with an expected market share for contactless of 37 per cent by 2015.”
KPMG believes that acceptance of mCommerce as an alternative to cash or credit card payments owes as much to the expansion of the smartphone marketplace as it does to retailers recognising the need to adapt.
According to KPMG’s figues, smartphones accounted for 29 per cent of all mobile phone sales in 2011 – almost double the figure sold in 2009 (15 per cent). The data also shows that 21 per cent of retailers already view mPayment capability as important enough to be their ‘main activity or, at least, a key enabler’. Only 2 per cent see mPayments as unimportant, believing they will have no bearing on their organisation. 
It’s also clear that the core technology players are jostling for position, with the report citing examples such as Acer’s announcement to launch NFC-enabled smartphones before the end of this year, and HTC teaming up with the Chinese bank card network, China UnionPay, to turn their smartphones into digital wallets for use in designated department stores, restaurants, supermarkets and cinemas.
Gerry Penfold, partner within KPMG Risk Consulting, says: “There is certainly scope for collaboration between smartphone manufacturers, telecom companies and retailers, but the big, unanswered question revolves around who the customer will trust with their data and their mCash. Battle lines will be drawn around issues such as security, infrastructure and interoperability of devices. For consumers, speed and security of payment will be the mark of success, but for technology and telecoms companies, speed to market will be critical and how quickly they can respond will depend on the impact of regulation. Clearly though, the winners will be the companies that can provide the richest consumer experience with the greatest convenience.”
The report concludes by warning that tightening regulatory requirements will force the players to consider how they use customer data. For example, with China becoming a significant market for mPayments, the government has introduced licence requirements for third-party payment providers. Similarly, the European Payments Council has issued guidelines to develop standards around mPayments.
You can access the report here.
