Saturday, March 29, 2008
Mobile payments adoption gathers pace
Posted by Miya Knights at 1:14PM, Tuesday 25th March 2008; "Following previous analyst predictions that mobile banking and payments are set to take off, research released today reveals new optimism for growth in the sector. Companies operating in the advanced payments sector are optimistic about growth, a survey released today has found, building on previous analyst predictions that areas like mobile banking and payments are set to take off. The survey of 30 European players and ventures in the growing industry - including Monitise, LUUP and Paybox - were asked about their views on 'advanced payments,' which management consultancy Oliver Wyman (who also conducted the research) characterised as enabling "consumers to transact through a variety of non-traditional devices, such as their mobile phone, contactless cards and the internet". Just over half (57 per cent) of companies in this sector told the consultancy they expect to see strong growth over the next 12 months, and respondents were "very confident" that the advanced payments industry will make significant progress in 2008/09. The report said this could be attributed to the increasing sophistication and cost effectiveness of the technology involved. This is particularly true of mobile phones, which the survey highlighted as the next area for big development in payments technology. This echoes the findings of telecoms analyst Juniper Research, which only this January said mobile payment technology amounted to a "gold rush" for the financial services industry. It predicted that just over 612 million mobile phone users would generate over $587 billion (£295 billion) worth of financial transactions by the end of 2011. The Wyman survey said emerging markets would be key battlegrounds for the industry. The majority of respondents ranked the Middle East, Asia, Central and Eastern Europe as most critical for their growth, with Asia being cited by 64 per cent of respondents as a key market for the future. The findings are supported by the fact that emerging markets generally have less developed traditional payments infrastructures in place, like a network of bank branches, and therefore are more likely to adopt new technology. In developed countries, the Wyman survey said the industry would focus in the near term on competing for the most compelling contactless card payments schemes and mobile banking systems, using near field communications (NFC) technology, like those pilots launched by Barclaycard and Transport for London late last year. But stimulating customer demand was seen as potential barrier to increased adoption, with a strong majority of respondents (64 per cent) saying this was one of their primary challenges.