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Mobile payment market growth slows in 2011

Billy MacInnes

The mobile payment market is growing slower than expected and the mass market adoption of near field communication (NFC) payments is at least four years away.

So says market research company Gartner despite predicting a 38.2% increase in worldwide mobile payment users in 2011 to 141.1m and a 75.9% increase in payment volume to $86.1bn.

According to Gartner research director Sandy Shen, growth is not as strong as anticipated in developing markets, despite favourable conditions for mobile payment, because many service providers have not adapted their strategies to local requirements.

As for NFC, many companies in developed markets have not understood the complexity of the service model. "The biggest hurdle is the need to change user behaviour by convincing consumers to pay with mobile phones instead of cash and cards," Shen said.

Merchandise payments will account for 90% of all transactions in North America and 77% of those in Western Europe because of the success of mobile applications stores like Apple's App Store.

SMS and unstructured supplementary service data (USSD) will remain dominant access technologies in developing markets while WAP will remain the preferred technology in developed markets. Mobile app downloads and mobile commerce are the main drivers of WAP payments. WAP will account for almost 90% of mobile transactions in North America and 70% in Western Europe.


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