Tag Archives: mPayment

Mobile Payment: $860 Billion By 2013?

At the Center for Future Banking they are actively examining the mobile space and attempting to understand the technical, social and business drivers that will define the mobile payments ecosystem. Informa Telecoms and Media’s presented the report called “Mobile Payments and Banking” a few weeks back.

Since the turn of the millennium we have heard that one day the mobile phone could replace the humble leather wallet, by storing electronic cash and enabling convenient electronic transactions. Yet so far, except for a few isolated cases, there has been little evidence that the consumer has embraced this new paradigm despite the availability of mobile payment and banking services in most markets worldwide. However, according to Informa Telecoms and Media’s recent report, Mobile Payments and Banking: Worldwide Market Analysis, Strategic Outlook & Forecasts to 2013, this day is getting closer.

Informa Telecoms & Media forecasts that in 2013 almost 300 billion transactions, worth more than US$860 billion, will be conducted using a mobile phone – a twelve-fold increase in gross global transaction values in just five years.

There is no doubt that the mobile internet is entering a substantive phase. For many years, a myriad of factors have held back the development of truly breakthrough applications that would capture hearts and minds; applications capable of driving through obstacles hampering consumer adoption. In fact, until just the past year it seemed as if the potential of mobile and mobile payments related services to create much value at all would take many years to develop. And while the ecosystems from a non-US perspective are fairly robust, the US picture was moving slowly.

But that is changing. In April 2008, the number of cellular users worldwide passed the 3 billion mark and reached an estimated 4 billion by year end. Growth in third-generation (3G) penetration is also accelerating, reaching nearly 7 percent of the global population by the end of 2008. Now, it seems as if we are reaching an inflection point, one that could have dramatic impacts to current value chains. And even more dramatic effects for participants and current ecosystem players, with a potential to redraw the playing field.

Still, the remaining challenges are real, and will need to be addressed jointly by a wide range of participants, including telecom, banking, regulators and governments. And this does not even touch the potential for wide ranging cross-industry collaborations around mobile banking, media and health. There is no doubt that the stakes are high – we put them at somewhere around $860B.

How VISA will change the way we pay mobile?

VISA showed some real life examples of Mobile Payments, Money Transfer and Payment-Related Services at GSMA Mobile World Congress 2009.

The real life examples to demonstrate how its innovations in mobile payment technologies can enhance consumers’ daily lives, providing speed, convenience, security and choice.

Mary Carol Harris, Head of Innovation at VISA, explained several examples how VISA will change the way we will pay mobile?

Here are some user scenarios for mobile payment:

  • Visa payWave embedded in a mobile device will secure mobile point of sale payments. Visa demonstrated both NFC-based and SIM-based contactless payments.
  • Mobile money transfer between Visa accounts, both handset-to-handset and online-to-handset. Mobile Transaction Alerts: Near real-time notification of card purchase activity delivered to the mobile device.
  • Targeted offers and coupons delivered directly to the mobile device and redeemed at near-by merchants.
  • Convenient cashless transactions on the move. Mobile merchants, such as a pizza delivery service, can accept Visa payments with the help of enhanced mobile handsets that double as a mobile acceptance device.
  • Co-branded mobile posters, signposting nearby coffee shops with the offer of exclusive mobile ‘buy one, get one free’ offers.