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Worldwide Mobile Payment Users to Reach 141 Million in 2011 – Gartner Says
6 months ago
New research from Gartner predicts that 141 million people around the world will make some form of mobile payment this year, up by 38.2% from 2010. The research also shows the volume of those transactions is set to reach $US86.1 billion, up by 75.9% from last year as well.
However, the research also notes that mobile payments aren’t taking off in several countries, especially in the developing world, citing “the complexity of the NFC” model.
“The biggest hurdle is the need to change user behaviour by convincing consumers to pay with mobile phones instead of cash and cards,” research director Sandy Shen told Boy Genius Report.
“Thanks to the success of mobile application stores, such as Apple’s App Store, and the efforts in driving mobile sales by major retailers, such as Amazon and eBay, merchandise purchases far outweigh other use cases in developed markets, which include North America and Western Europe.”
Gartner Says:
Mobile Payments in Developing Markets Growing Slower Than Expected
Worldwide mobile payment users will surpass 141.1 million in 2011, a 38.2 percent increase from 2010, when mobile payment users reached 102.1 million, according to Gartner, Inc. Worldwide mobile payment volume is forecast to total $86.1 billion, up 75.9 percent from 2010 volume of $48.9 billion.
Despite these strong growth projections, Gartner analysts said the mobile payment market is growing slower than expected.
“In developing markets, despite favorable conditions for mobile payment, growth is not as strong as was anticipated. Many service providers are yet to adapt their strategies to local requirements, and success models from Kenya and the Philippines are unlikely to be translated to other markets,” said Sandy Shen, research director at Gartner. While developing markets have favorable conditions for mobile payments, such as high penetration of mobile devices and low banking penetration, this is no guarantee of success, unless service providers adapt their strategies to local market requirements.”
“In developed markets, companies are trumpeting the prospects of Near Field Communication (NFC) without realizing the complexity of the service model. We believe mass market adoption of NFC payments is at least four years away,” Ms. Shen said. “The biggest hurdle is the need to change user behavior by convincing consumers to pay with mobile phones instead of cash and cards.”
Gartner expects Short Message Service (SMS) and Unstructured Supplementary Service Data (USSD) to remain the dominant access technologies in developing markets due to the constraints of mobile phones. Wireless Application Protocol (WAP) will remain the preferred mobile access technology in developed markets, where the mobile Internet is commonly available and activated on the phone. Mobile app downloads and mobile commerce are the main drivers of WAP payments, and WAP will account for almost 90 percent of all mobile transactions in North America and about 70 percent in Western Europe in 2011.
Money transfers and prepaid top-ups will drive transaction volumes in developing markets. These are seen as the “killer apps” in developing markets, where people value the convenience of sending money to relatives and topping up mobile accounts. This is most obvious in Eastern Europe, the Middle East and Africa, where these two services will account for 54 percent and 32 percent of all transactions in 2011.
“Thanks to the success of mobile application stores, such as Apple’s App Store, and the efforts in driving mobile sales by major retailers, such as Amazon and eBay, merchandise purchases far outweigh other use cases in developed markets, which include North America and Western Europe,” Ms. Shen said. “We predict that in 2011, merchandise purchases will account for 90 percent and 77 percent of all transactions in North America and Western Europe, respectively.”
Additional information is available in the Gartner report “Market Trends: Mobile Payments Worldwide, 2011.” The report is available on Gartner’s website at http://www.gartner.com/resId=1714114
Visa’s contactless technology now available at participating McDonald’s restaurants across Canada
Toronto, July 7, 2011
Visa announced today that more than 1,400 McDonald’s restaurants have joined a growing roster of Visa payWaveTM contactless payment enabled merchants across Canada. Diners will now be able to simply “wave and go” when purchasing a Big Mac®, a Happy Meal® or any of their favourite menu items at McDonald’s.
Contactless payments deliver speed and convenience to merchants and Visa cardholders while offering the built-in security benefits inherent in chip technology. Currently available nationwide for front counter service, McDonald’s will be accepting Visa payWave at drive thru counters later this summer.
“We’re excited to be able to offer our customers the convenience, speed and security of contactless payments in our restaurants,” said Jacques Mignault, Chief Operating Officer, McDonald’s Restaurants of Canada Limited.
“Visa’s global experience has shown that contactless payments are more convenient and faster than cash and are the perfect solution for on-the-go smaller purchases, like McDonald’s meals,” said Mike Bradley, Head of Products, Visa Canada. “It’s exciting to have one of Canada’s favourite restaurant chains onboard, offering the convenience of contactless payments to Visa cardholders.”
Visa payWave cards employ EMV chip technology, which uses a standard 128-bit encryption technology, to securely store and encrypt confidential information. When customer uses their card at McDonald’s, Visa payWave transmits the payment information securely to the terminal reader and the purchase is processed in the same manner as a swiped transaction. The card and the terminal exchange security information, then conduct a secure payment transaction, all in less than one-third of a second. The cardholder does not need to swipe their card or let it out of their possession keeping the transaction quick and secure.
Visa employs a layered approach to its fraud prevention efforts, including Zero Liability, which protects card holders against fraud if a stolen Visa card is used to purchase goods in person, online, by mail or by phone.
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About McDonald’s Canada
McDonald’s is the leading foodservice company in the world. McDonald’s Restaurants of Canada Limited and its Canadian franchisees own and operate more than 1,400 restaurants and employ more than 77,000 Canadians coast to coast. Approximately 75 per cent of McDonald’s Canadian restaurants are locally owned and operated by independent entrepreneurs. For more information about McDonald’s Canada, visit the company’s web site at www.mcdonalds.ca
Media Contact:
Carla Hindman, Visa Canada
+1 416-860-8850
chindman@visa.com
On the Call: MasterCard CEO on mobile payments
9 months ago
by Associated Press
PURCHASE, N.Y. (AP) — Electronics payment processors like MasterCard Inc. and Visa Inc. are trying to adapt to new technologies for making purchases. That includes the use of mobile devices, including smartphones that enable “contactless” payments just by flashing a phone at an electronic scanner.
One obstacle to adoption of the technologies is the small number of electronic terminals that retailers have installed to accept such payments
After announcing the company’s first-quarter earnings on Tuesday, MasterCard President and CEO Ajay Banga was asked by Wells Fargo analyst Timothy Willi about his expectations for mobile payments technology. Banga said several obstacles remain before the technology can become widely used, especially in the world’s developing economies.
QUESTION: “How rapidly do you expect merchants in emerging markets will install terminals?”
ANSWER: “There are two angles to this. One angle is in the emerging markets, given the current absence of terminals that would accept something to do with a mobile phone, I’m not sure that the mobile payment ecosystem in those markets will develop the same way as it might in a somewhat more advantaged country that has better terminalization in place.
“Mind you, having said that, contact terminalization is still relatively small, even in the United States and in developed countries.
“But, you know, whether mobile payments develop … as a contact-based system, or an SMS-based money movement system, or as a true mobile commerce-enabled system, with the rapid deployment of smartphones in the world, I think some version of all three will begin to develop. What we’re trying to do is to place bets in all three, and to be partners with institutions — banks and phone companies and merchants — in all three spaces.”
But Banga said many obstacles are preventing widespread adoption:
“The cost of those terminals needs to become somewhat cheaper. The fact that if you could find intelligent ways to make that terminal more easy for a small merchant to adapt to, that would help us as well. There’s a lot of work to be done in this ecosystem yet.”
He closed by saying he expects “a lot of energy” will be devoted to these technologies. Be he was cautious about how fast it will play out: “I don’t know that it will happen in six months or one year compared to two years or three years. I don’t know the answer to that yet.”
Copyright 2011 The Associated Press. All rights reserved. This material may not be published, broadcast, rewritten or redistributed.
