Mobile commerce has still not reached the tipping point as various players struggle to find the right business model and consumer purchase behavior becomes more complex.
According to MasterCard's Mobile Payments Readiness Index - which rates markets based on metrics such as infrastructure, environment, consumer readiness, financial services, regulations and partnerships - Singapore is ranked as the most-ready market for m-commerce, followed by Canada, the US, Kenya and South Korea.
However, even Singapore only scores at 45.6% out of 100. The index considers a score of 50 the minimum threshold for the takeoff point for m-commerce services, said Philip Yen, group head of Emerging Payments for Asia/Pacific, Middle East and Africa at MasterCard, who showed the index scores during the CommunicAsia Summit Thursday.
One issue holding back m-commerce is that not nearly enough merchants are optimizing their websites to handle even mobile screens, let alone mobile payments, said Lawrence Chan, VP of merchant services APAC and GM for Southeast Asia and India at PayPal Asia Pacific.
"About 90% of transactions drop off because the site is not mobilized. The customer has to do a lot of pinching and scrolling, and they have to input a lot of information on a small screen," he said.
That requires payment providers to develop simple payment tools that allow users to pre-register information and streamline the payment process to a few clicks. Credit card giants Visa and MasterCard, as well as online players like PayPal, are doing this now.
But m-commerce also faces challenges of a shifting landscape as the rules of the customer experience change to the point of blurring the lines between online and offline commerce, said Niki Manby, head of Emerging Products at Visa.