Taking into account current knowledge of market drivers, the global value of mobile payments will triple from $311 billion in 2013 to $1.1 trillion in 2017, representing a rise from less than 1% to 3% of the world card payments. According to Timetric analyst, Vladimir Vukicevic, mobile payment is waiting for a game changer, like the iPhone was for smart phones.
"Solutions like Zapp and Chirpify are the ones to watch. VocaLink, the UK interbank organisation, launched its Zapp service earlier this year with an aim to link consumers’ bank accounts to their mobile phone numbers and make real-time person-to-business payments through their handsets."
"Although VocaLink has so far struggled to get support from large UK banks and retailers this may change soon. The UK Payments Council phone number-based mobile payments proposition, to launch next year, will focus on person-to-person payments. This and similar initiatives may soon rapidly change the way we pay providing a boost to the mobile payments industry in the UK. "
New innovative payment solutions
Mobile payments have had most success in regions with a lack of traditional banking infrastructure, but high levels of mobile phone penetration. Mobile payments in Kenya now represent almost a third of the country’s GDP and an estimated 6 percent of the total value of mobile payments in the world.
According to Vukicevic, "The success of M-Pesa in Kenya is the poster child of the mobile payments industry."
The developing world is not lagging behind on innovative payment solutions. For example, customers of Citibank in India use mobile messaging for instant fund transfers.
"In developed economies, the current payments infrastructure is regarded, largely, as efficient and secure. The incentive to switch is much harder to achieve – though the savings to both customer and bank may be significant," says Vukicevic
New social media payment methods
Most innovations in payments have been driven by the popularity of mobile phones and social media. The number of mobile users around the world is expected to reach 6.8 billion by the end of 2013 with emerging markets accounting for around three-quarters of the total. Nine out of 10 people in emerging markets hold mobile phones (compared to 13 phones per 10 people in developed world).
The popularity of social media platforms has also caught the fancy of payment service providers, as we are starting to see convergence of e-commerce platforms with social media networks. For example, Chirpify, a US-based company, enabled payments directly on social media via comments and replies instead of getting redirected to an e-commerce or banking websites.
‘It has taken decades to financial service providers around the world to build a huge pool of payment cards but it may now take much less time for cards to be replaced with other means of payments including mobile payments’ says Vladimir Vukicevic.
‘Other services such as mobile wallets are also expected to gain importance as consumers become increasingly aware and confident about their use’ says Vladimir Vukicevic.
The Timetric forecast report, ‘Consumer Centric Payment Innovations’
will be published…
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‘Mobile payments’ is defined as payments made for purchase of goods or services using mobile devices such as mobile phones.
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