The mobile payment market has matured significantly over the past five years, with plenty of growth set to come, according to telecoms analyst firm Arthur D Little.
The recent M-Payments Surging Ahead report highlighted an initial burst of competition as various companies raced to implement their own mobile transaction channels, but noted that only one or two dominant mobile payment platforms have prevailed in many national markets.
The research revealed that the focus has shifted to cross-border interoperability and standardisation, in an attempt to help improve the breadth of services and the user base.
Mobile payment services have been driven in part by the continued growth of mobile data access, and are expected to continue to develop over the coming years, rising globally at 68 per cent per annum to a transaction volume of almost $250bn (£171bn) by 2012.
The development and adoption path will vary by region, according to the report, with emerging countries growing faster and taking up around two-thirds of the total transaction within three years. Mobile payments in developed markets are expected to augment, rather than replace, existing systems.
"Despite the current hype, we do not expect to see massive near field communication [NFC] adoption in a majority of developed countries until 2011 at the earliest," said Karim Taga, co-author of the report and director at Arthur D Little's telecoms, information, media and electronics practice.
Success lies in making the most of existing customer relationships, according to Taga, further pushing the idea of augmenting existing channels with a focus on low-value, but high-frequency, transaction services, highlighting the convenience that mobile payments can offer.
However, mobile operators need to play an active role in shaping the regulatory environment in order to preserve the long-term market development potential, and help develop interoperability between countries. In developed markets, operators particularly need to focus on reaching the required critical mass in terms of retailing partners, particularly as the report highlighted NFC as a prime candidate to help move over to higher value transactions.
The research also encouraged financial institutions to investigate mobile payments as a means of differentiating themselves and tapping into the micro-cash payment market.
Similarly, merchants are advised to look to the mobile payment channel as a differentiating factor which can increase customer convenience and mobility, as well as the accessibility of services and goods.
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