Innovative ways to make mobile pay

John C. Tanner
25 Jun 2012

Mobile payments is widely tipped to become a hot growth area for cellcos, and in some markets in Asia Pacific it already is, from smartcard-based mobile wallet services in Japan and Korea to remittance payment services in Southeast Asia.

But it's early days, and the mobile payment pie is going to get a whole lot bigger. IE Market Research projects global mobile payment revenue to grow from $47.2 billion in 2011 to $998.5 billion in 2016 (that's a CAGR of almost 84%). KPMG is even more bullish, forecasting the value of global m-payment transactions to pass $958 billion by 2015 at a growth rate of 97% a year.

Not unexpectedly, NFC technology figures heavily in the mobile payments future as a key driver, especially as more and more NFC-enabled handsets start to hit shelves. There are more than 50 such devices available commercially at press time, with another 30+ models announced.

That said, NFC has not quite broken into the mainstream, although services are still being launched to varying degrees. Perhaps significantly, Japan - which practically invented the smartcard-enabled mobile wallet with proprietary FeliCa technology - is now embracing NFC as well. Late last year, DoCoMo, KDDI and Softbank formed the Japan Mobile NFC Consortium to coordinate the adoption of multiple international standards for NFC, while KDDI launched an NFC-based payment service in partnership with Gemalto in January.

Whether that translates into NFC going mainstream this year remains to be seen. In any case, analysts are bullish - ABI Research estimates NFC-based mobile wallet users will grow to 594 million in 2016 while Juniper Research says NFC will facilitate transactions valued at $74 billion by 2015, adding that the increasing use of mobile devices as an alternative to credit cards and paper tickets is one of the fastest growing segments of the m-commerce market.

But while NFC may play a key role in driving the mobile payments space, it's just one element in a much larger ecosystem that's becoming increasingly innovative in terms of new services, from micro-finance and micro-insurance to in-app purchases and over-the-top wallet services.

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