Small payments to lead M-Commerce revival

The market for mobile payments is set to boom over the next few years as mobile handsets replace cash and cards at many retail outlets, according to a new report on Mobile Proximity Payment Services by wireless consultancy BWCS. By 2010, mobile transactions in stores and at vending machines around the world will be worth over US$380 billion, claims the report.

ìMobile proximity payment services ñ the purchase of goods or services at a retail point of sale or vending machine via a mobile phone ñ are about to experience a huge boost,î argues report author Ross Parsons. ìThe rapidly growing global usage of contactless payment cards is creating a large pool of consumers attuned to making swift, cashless payments. This massive and receptive audience will be manna from heaven for mobile operators hoping to launch MPP services.î

Growth of Contactless Payment Cards in the Transport Industry 2003 ñ2010 (millions of users)


The MPP market will also benefit from the increasing popularity of mobile data services in developed markets, many of which require users to make a small payment for downloaded content. According to BWCS, payment for such services will boost consumer acceptance of the mobile handset as a trusted transaction tool. ìMPP services around the world will greatly benefit from this double whammy, which is what we are seeing now in Japan and Korea,î argues Parsons.

However, the report warns that the mobile industry, mired in a swamp of conflicting payment standards and weighed down by a wide variety of m-commerce associations and forums, is in danger of missing out on this opportunity. ìThe industry is far from unified in its approach,î claims Parsons ìand this will not help operators as they bid to persuade consumers to switch to MPP services. Disagreements over standards will disrupt this process and may yet stifle the market at birth.î

Korea and Japan are, so far, the only two countries to have commercially launched MPP services. However, BWCS believes that others will soon follow. By 2010, Japan is expected to remain the largest market for MPP services, generating US$93 billion in transactions. The next largest market willbe the US, BWCS predicts, which will account for around US$67 billion in MPP transactions. With the continued growth of contactless technology in European transport systems and the recent backing of MPP by such heavyweights as Vodafone, T-Mobile and Orange through Simpay, BWCS believes that Europe will be well on the way to catching up with Asia in this sector by 2010.