Sunday, April 27, 2008

M-payments to reach 100 million users by 2011

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.

PayPal and Sprint team on P2P mobile payments

PayPal has partnered US wireless operator Sprint to offer its person-to-person services via the telco's new downloadable mobile wallet.´ Sprint subscribers with a PayPal account can send money to anyone in the world with a mobile phone number or e-mail address through the MyMoneyManager application. The recipient gets a text message to let them know money has been sent to them. The Sprint application - which is also being used by BB&T and IBC Bank - was developed by California-based mobile banking outfit mFoundry. PayPal launched a text based mobile payments service in 2006, enabling registered users to make person-to-person fund transfers or pay for purchases via their handset.

This was followed up last year by Mobile Checkout which lets customers make purchases from online merchants using the mobile Web. Person-to-person mobile payments is an increasingly important market. Earlier this year PayPal rival Obopay launched a service to let US customers transfer money from their account to non-Obopay users. But the big market for peer-to-peer transfers could come from remittances. Western Union has teamed with GSMA - an international trade group of mobile phone operators - to develop the commercial and technical specifications for connecting mobile operators to its money transfer network.