The Green Sheet Online Edition
November 28, 2011 • Issue 11:11:02
Global mobile payments to reach $945 billion by 2015
Surveys of more than 50,000 consumers in 50 countries that collectively account for more than 80 percent of the world's mobile subscribers indicate mobile payment transactions will amount to $945 billion by 2015 - a compound annual growth rate (CAGR) of 98 percent.
The IE Market Research Third Quarter 2011 Global & Regional Mobile Payments Market Forecast was released in September 2011 and was supplemented in November 2011 with closer looks at regional markets. The regional reports include data on mobile payments in New Zealand, Canada, Taiwan, Denmark, Austria, the United States, Mexico, the United Kingdom and Eastern Europe, among others.
IEMR Vice President of Research Nizar Assani said the report also includes information on large, emerging markets such as India and China. He noted the importance of mobile payments is confirmed by the commitment of the major card companies to mobile payment technology.
"A lot of merchants are using mobile payments," Assani said. "With NFC [near field communication] particularly we are seeing the time to transaction declining. This is something consumers and merchants want to happen as much as possible.
"We are forecasting on a global level the total volume of transactions going to $945 billion by 2015. This means the market is growing by nearly 100 percent a year."
Here are some conclusions drawn from the forecast:
- The number of mobile payment users is about 354 million people. IEMR predicts this will rise to 893 million by 2015, a CAGR of 18.4 percent. The gross value of mobile transactions in 2010 was $31.5 billion. This is predicted to rise to $945 billion by 2015.
- SMS was used in mobile transactions 72.1 percent of the time in 2010. SMS use is predicted to decline nearly 20 percent by 2015, but it will still account for more than half the market.
Meanwhile, NFC captured only 17.6 percent of mobile payment transactions in 2010, but NFC transactions are expected to take off and more than double by 2015.
The forecast said, "The decline in the share of SMS transactions is not so much about the technology as it is about adoption of NFC technology in developed markets. ... NFC offers the potential 'sweet spot' of access to millions of retail POS terminals, something that SMS cannot match as a transaction technology."
- Merchandise purchases from mobile transactions came to $5.78 billion in 2010. IEMR believes this will increase to $176.1 billion by 2015, a CAGR of 100.1 percent. The survey found the average transaction value of purchased merchandise was approximately $7.22 in 2010. The company predicts this will rise to $10.61 by 2015.
"In our view, the key impediment to merchandise purchases ... is that it requires an extensive merchant network with pre-registration of the user's bank accounts or credit cards with the 'made for mobile' service," the forecast authors said.
- Prepaid top-ups are another area where IEMR foresees enormous growth. It estimates current prepaid top-ups at $10.3 billion. The firm believes this will rise to $158.7 billion by 2015, for a CAGR of 70.8 percent. Mobile money transfers, now below $20 billion, are forecast to increase to $114 billion by 2015 - a CAGR of 87.7 percent.
"We think that prepaid top-ups will be extremely popular in developing markets because they allow for small-denominated and frequent transactions that fit the needs of cash-starved societies," the forecast stated.
Survey statistics indicate consumers are not ready to use mobile devices for money transfers on a large scale. The report predicts most mobile money transactions will not be mobile-to-mobile but, rather, mobile-to-cash, requiring the physical delivery of the cash.
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