The global mobile payment market, consisting of digital and physical goods purchases, near field communications (NFC) and mobile money transfers, will be worth $670 billion in 2015, according to a July 2011 white paper from Juniper Research. Data from “Mobile Money Goes Mainstream” indicates this figure will be more than double current levels.
N. America, Far East Will Dominate Market
From a regional perspective, Juniper predicts North America will represent the largest share of the global mobile payment market in 2015, closely followed by the Far East/China. Western Europe will follow, with other developing regions representing much smaller portions of the total market. Each region will roughly maintain its mathematical portion of the market as it grows.
Remote Mobile Payment Differs from POS Mobile Payment
The white paper defines remote mobile payment as when the storefront or retailer is remote to the mobile user, such as paying for digital goods by premium rate SMS or buying physical goods from a mobile web-enabled retailer. Meanwhile, a proximity or POS mobile payment is when the storefront or retailer is physical and the user is located at or near to it.
Major Remote Mobile Payment Schemes
The white paper identifies eight major remote mobile payment schemes:
1. “Direct to Bill” (D2B): Offered by mobile phone operators, this system is offered to account holders as an alternative to credit or debit card accounts and can also be offered as an alternative to credit or debit card payments for online purchases, typically with a one-time SMS-based authorization code.
2. Premium Rate SMS (PSMS): Merchants and retailers can offer services via SMS, with a premium rate charged for each SMS sent by the consumer and the merchant/retailer taking a share of the revenue, which is charged to the consumer’s mobile phone bill.
3. Mobile Web/WAP Billing: Similar to payment on standard e-commerce sites, this form of remote mobile payment involves payment by traditional methods such as credit or debit card.
4. SMS/Java/SIM Toolkit: Mobile payment is initiated using SMS and funds are transferred from a registered account or mobile wallet.
5. Person-to-Person (P2P): P2P payments involve the transfer of funds between individual mobile users.
6. Smartphone Apps: Numerous apps enable mobile payment by credit card or other consumer accounts.
7. Contactless Payment: A Near Field Communications (NFC) chip is embedded into the phone and interacts with a payment application that is preloaded into the phone or downloaded over the air. The phone is then waved near a contactless reader to execute the transaction.
8. In Store: Mobile is increasingly being offered as an alternative payment platform in physical stores.
Remote Mobile Payment Users to Reach 2.5B
The number of remote mobile payment users buying digital and physical goods will reach 2.5 billion by 2015, according to another July 2011 white paper from Juniper Research. Data from “The Good, the Payments and the Mobile” indicates this will represent 40% growth from 1.8 billion users this year.