A report predicts that the number of people making mobile payments around the world will rise to 103,9 million in 2011, from 32,9 million in 2008. SMS and 0900 payments will continue to drive mobile payments even though the adoption of wireless application protocol (WAP), unstructured supplementary service data (USSD) and near field communication (NFC) contactless services will grow, the study suggests. The report indicates that banks have less chances than mobile operators when it comes to obtaining the greatest possible profits from m-payments. Researchers say banks can ‘justify the investment if they look at mobile as an extension of their existing channels and bundle payments with additional banking services’. The report warns that banks may be hit by offerings from Obopay and PayPal. Moreover, m-payments services provided by non financial institutions may threaten the card business, researchers suggest. Researchers point out that m-payments services have chances to succeed in developing markets where many people are unbanked and where there payment options are scarce. In developed markets, the service is set to become just an extension of existing options.
Asia Pacific will continue to lead the way on mobile payments in the near future, mainly due to the continuous rise in the adoption of the service in massive markets in India and China. Western Europe and North America lag behind because of a more established payments infrastructure and greater concern over security. Currently, Asia Pacific has 85 percent of the mobile payments market, with a projected 28 million users in 2008. Western Europe is expected to have 499,000 users in 2008, while North America is projected to have 1 million users. The report indicates that NFC-based contactless technology can have success in Western Europe and North America because of the convenience it offers and to the ‘cool factor’. The report was published by research firm Gartner.