Increasing Consumer Adoption of M-Payment Schemes - Report

Mobile payments are set to rise to US$10 billion in total revenue by 2010, thanks to the entrance of new players offering m-payment schemes and subsequent consumer demand, according to Alan Goode, senior analyst and author with Juniper Research. And following the announcement of the expansion of PayPal services into the micro mPayment and mRetail sector, this will only serve to facilitate a fundamental shift in global consumer payment services now and into the future.

This new prediction by Juniper Research follows media reports that PayPal has decided to enter the fray of mobile payments, offering a new texting service called PayPal Mobile. This new service will offer its users the freedom of sending money, donating to charities and purchasing items via a mobile payments platform.

Juniper's forecasting of the advancing adoption of mobile payment services - with the total number of m-payments forecast to rise from 78m to 175m in the coming year alone - can be seen as a realizing trend, with Paypal's statement of intention. This mirrors the trend seen with the implementation of card based vending solutions - a method that normally increases the average transaction value.

Certainly with their i-mode FeliCa service, transaction data captured by NTT DoCoMo in Japan suggests the average transaction value for mobile payments will surpass the traditional sub US$5 micro-payment seen with cash-based payments. Author and analyst of the latest Juniper report into mobile commerce strategies, Alan Goode states: "cashless purchases made using NTT Docomo's i-mode Felica scheme are currently averaging $6.20, about 25% more than purchases made with prepaid e-money cards and cash".

Highlights from the report include:

• By 2010, 32% of Japanese mobile users will be buying tickets using a mobile phone.
• Adoption rates in current mobile ticketing implementations is as high as 30% of the total tickets issued within the scheme.
• By 2010, 87m European mobile users (15% of total) will be using their mobile devices for mobile ticketing purposes.
• The use of mobile barcodes is revolutionising the way we purchase and store tickets.
• The bullish economies of India and China are fuelling the five-fold increase in annual m-retail transactions for the Rest of Asia Pacific forecast for 2008.
• Juniper predicts that there will be sufficient consumer demand, adequate payment schemes available and enough retailers supporting these schemes to see worldwide mobile payment revenues reach over $10billion by 2010.

Report author Alan Goode said: "The modern mobile phone and mobile network provides unparalleled levels of commercial potential. We are now beginning to enter the mCommerce era - and this era will see all of its expectations met."

Posted to the site on 10th May 2006