An interesting report from Companies and Markets released earlier this month on the mobile payment market. According to the report, the market for mobile payment is forecast at $265 million by 2015.
A significant driver has been the growth of mobile money transfer facilities particularly in Asia-Pacific markets such as Philippines. Another driver is the NFC trials being undertaken and promoted by financial services firms and operators.
This drives home the fact that the growth for mobile money or mobile payments is not coming from the mobile banking facilities which are being initiated by banks in developed markets. Rather the growth is coming from mobile P2P transfers, remittances, transfers in markets as geographically diverse as APAC, LATAM and Africa.
And why? To put things in perspective, there are 4 billion mobile subscribers world-wide whereas there are only 1.6 billion bank accounts approximately. A clear indication that there is a huge segment of people who get their first access to financial services via their mobile handset rather than from a bank!
For this segment, mobile SMS is the most significant mobile payment channel.
NFC is gradually developing. A study from IMS research had forecast NFC IC shipments of 785 million in 2015.
My feeling is the development of the NFC market will finally drive the mobile payment market in developed markets – whether it is mobile payment services that include transport passes, mobile wallets, coupons, price comparison, bill payment services – and the list goes on.
In fact the market seems to be preparing and driving in this direction as well. After the long delayed arrival of NFC, there is a host of M&A activities in this space as well – Broadcom acquired Innovision earlier this month, Inside Contactless acquired the smart card division of Atmel, Gemalto has been ramping up activities.
The recession may slow down the pick-up of mobile payment services once again but the geographical and economic diversification of the addressed markets will ensure that the overall growth continues.
