Some countries are making progress towards adoption of mobile payments, but on the whole, there is still a ways to go before the world reaches mobile payment readiness, finds MasterCard WorldWide in a May 2012 study that combined public and proprietary data with original market research. The study examined the preparedness and receptivity of 34 countries for person-to-person (P2P), mobile e-commerce (m-commerce) and mobile payments at the point of sale (POS), finding that on a scale of 0-100, the average score across all countries was 33.2. In fact, no country reached the inflection point of 60 on the adoption curve, with Singapore garnering the highest readiness score of 45.6, ahead of Canada (42) and the US (41.5).
The 6 components of the score are: consumer readiness (measuring consumer familiarity with, willingness to use, and current usage of the 3 types of mobile payments); environment (measuring economic, technological, and demographic elements such as a market’s per capita income and consumer access to the internet); financial services (measuring the level of development consumer financial services); infrastructure (measuring the breadth and sophistication of the mobile phone industry through variables such as mobile penetration and network coverage); mobile commerce clusters (analyzing partnerships or joint ventures among members of the mobile payments ecosystem); and regulation (assessing the structure and efficiency of a market’s legal and governmental bodies in their business interactions).
US Tops for Environment; Singapore Leads for Infrastructure, Regulation
The report identifies the leading countries for each category, with the US taking top billing in the environment component, driven by household expenditure per capita of three times the index average ($33k vs. $11k). Singapore took top ranking in the infrastructure component, due in part to 100% of the population being covered by a mobile network, compared to the overall 94% index average. Singapore also over-indexed on internet and mobile phone penetration.
For the regulation component, Singapore also took the top ranking, due to its well-developed laws relating to information and communication technology.
Kenya Best for Consumer Readiness
Kenya was the top scorer on the consumer readiness component, fueled by Kenyan consumers’ extremely high levels of familiarity with, and frequent usage of mobile payments, due to the success of M-Pesa. The country also scored above the index average for consumer POS usage and consumer m-commerce usage.
Other component leaders included: Japan, for the financial services component; and Canada, for the mobile commerce clusters component.
- The US’ vulnerabilities were apparent in its consumer readiness scores. The consumer scores skewed male and young, and while interest in mobile payments increased with income, it declined with age. This trend for greater affinity for mobile-commerce among youth is supported by a May 2012 study by Millennial Media and comScore, which showed that mobile finance users tend to skew young and wealthy.
- According to the MasterCard report, consumer readiness in Latin America is highest in Brazil and Colombia.
- In terms of consumer readiness, 9 of the top 10 component leaders are located in the Middle East, Asia, or Africa.
- Within Europe, UK consumers demonstrated the highest levels of familiarity with and willingness to use mobile payments.
About the Data: The MasterCard report is based in part on a survey of 1,000 consumers in each country. Other sources included: United Nations (2011); US Census Bureau (2011); World Bank World Development Indicators (2010); International Monetary Fund International Financial Statistics (2010); International Telecommunications Union (2010); World Economic Forum Global Information Technology Report (2011); World Economic Form Global Competitiveness Report (2011); Euromonitor International (2010); The World Bank Information and Communications for Development Online Database (2011); CIA World Factbook (2012); and Proprietary Consumer Research for MasterCard Worldwide (2011).