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Mobile payments market ramps up but still a way to go

by Scott Bicheno on 12 May 2010, 11:55

Tags: IDC, Square

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Mobilising gradually

Last week Juniper Research released a study estimating the global mobile payments market will quadruple by 2014, reaching $630 billion in purchases and money transfers. It stresses, however, that even by that stage mobile commerce will only account for five percent of all e-commerce sales.

Meanwhile IDC today has a look at the EMEA mobile payments market. It concludes that, while mobile banking is set to advance rapidly in EMEA over the next few years, mobile retail will lag behind as the lack of an obvious business case means that retailers will be slow to invest in NFC (near field communication) infrastructure.

"Our analysis showed that whilst the digital goods segment will account for nearly half of the market in 2010, the emerging segments such as physical goods payments, NFC and money transfers will impact the market rapidly," said Juniper's Howard Wilcox. "By 2014 for example we forecast that physical goods mobile payments market will be worth $100bn."

"Mobile payments are still an emerging technology capability that will take significantly longer to bear fruit than most industry observers hope," said Trevor LaFleche, senior research analyst at IDC. "Shifting technological foundations of what constitutes a mobile device will confound industry purists, as has often happened when a technology does not take off as predicted.

"The varied nature of existing infrastructure and consumer need will continue to split the EMEA region into three distinct segments, which will need to be uniquely served to improve the penetration of the correct payment service to the correct market."

These reports pretty much confirm the current consensus - that we may well be headed towards a future where the mobile phone replaces cash and plastic, but that a hell of a lot of pieces have to fall into place for this to happen. In the meantime, we'll continue to see start-ups like Square dabble in mobile payments to see what sticks.

 



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