Mobile payment users will hit 141.1 million in 2011, a 38.2% increase from 2010, according to a new report from Stamford, Conn-based research firm Gartner, which pegged the 2011 global mobile payment volume at $86.1 billion, up 75.9% from 2010 volume of $48.9 billion.
Despite that superficially brisk growth, take up is in fact proving slower than expected, according to Gartner analyst Sandy Shen.
Shen elaborated: “In developing markets, despite favorable conditions for mobile payment, growth is not as strong as was anticipated. Many service providers are yet to adapt their strategies to local requirements.”
Such issues are proving especially severe in developing markets, Shen suggested, but there are similar forces holding back mobile payment adoption even in developed countries.
She went on: "In developed markets, companies are trumpeting the prospects of Near Field Communication (NFC) without realizing the complexity of the service model. We believe mass market adoption of NFC payments is at least four years away. The biggest hurdle is the need to change user behavior by convincing consumers to pay with mobile phones instead of cash and cards."
Looking ahead, Gartner sees age-old mobile technologies predominating in mobile payments for some years. Specifically, it sees SMS (text messaging) and Unstructured Supplementary Service Data (USSD) staying dominant in developing countries – they work on just about any mobile phone – and in the developed world Gartner pinpoints WAP (Wireless Application Protocol) as the mainstay.
Gartner also identified money transfers and pre-paid top-ups as the “killer apps” that will drive transaction volume in developing countries.