Mobile payment transactions growing to $150 billion
Mobile payment (m-payment) options are being rapidly accepted by consumers and are working so well that m-payment transactions are expected to reach $150 billion by the end of 2011 and $556 billion by 2016 - an annual projected growth rate of 30 percent, a Visiongain Ltd. management report stated.
The Mobile Payment: Operator Strategies, Opportunities and Challenges Report 2011 said m-payment growth is due to the ever increasing number of mobile subscribers, which is expected to reach 6.4 billion by 2016. The number of m-payment users is expected to grow from 140 million at the end of 2011 to 750 million in 2016.
"Repeated studies have proven that there is a considerable consumer demand, potential for consumption, conducive industrial environment and the commitment on the part of its stakeholders to make this growth happen," the report said. "The issues which need urgent attention and redressal at this point by the industry are the lack of standardization and guaranteed security solutions."
The authors believe they have conservatively estimated the growth potential of the m-payment sphere. Western Europe is expected to grow at the most rapid rate in its adoption of m-payment (37.3 percent) technology. The authors noted more than 50 million Japanese favor near field communication (NFC) technology on their phones as their preferred payment option. The authors expect India and China to quickly follow with wide NFC adoption.
"The adoption of NFC will continue to gain momentum, and Visiongain believes that by 2016, 658 million mobile phones will be enabled with NFC," the company stated. Visiongain feels the great advantage of NFC is security. Data can be securely encrypted using the Advanced Encryption Standard, which the authors stated is particularly important for the ever more popular mobile wallets. They noted many NFC systems also use time-based tokens that change credit card numbers every few seconds.