Mobile phone payments set to increase
The use of mobile phones as a payment alternative to cash, checks or
credit cards looks set to increase significantly. In order to assess the
mobile payments market, KPMG conducted a global online survey of 970
companies between the period of September 2010 and February 2011.
Mobile payments are evolving rapidly and changing the way consumers
and businesses operate. As technology and telecommunications companies
roll out mobile payment applications and services, mobile strategies are
beginning to transform existing business models in a number of sectors
such as banking and retail.
The nature of mobile payments' transformative effect depends
significantly on a country's state of economic development and the
existing payments infrastructure.
In emerging economies, mobile payments will accelerate the pace,
scale and reach of commerce by enabling electronic transactions and
displacing cash.
In developed economies, mobile payments will transform the chain of
commerce beyond payments, but in order to do so, will have to reach a
level of convenience and availability on par with today's alternatives.
In every market providers will need to overcome potential security
concerns. Mobile payment business opportunities are complex due to an
abundance of new and existing players from multiple industries, but the
stakes are high: billions of dollars in transactions.
This survey reveals that the payments model is evolving and mobile is
enabling a business transformation for services firms, telecom
providers, technology vendors and retailers across the globe.
Companies across these industries share a common outlook regarding
many aspects of mobile payments. Specifically:
Mobile payments will matter
The majority of companies surveyed 58 percent have a mobile payments
strategy in place today, and half of those are already offering a mobile
payments service.
Telecom providers are the most likely to have a strategy in place,
followed closely by financial service companies.
Mobile payments are preparing to go mainstream Nearly one in five
respondents say that mobile payments are very important today. But the
majority 54 percent believes that, while mobile payments will be
reasonably important in the future, today they are in their infancy.
Most companies we surveyed assess that it will take two to four years
for mobile payments to move into the mainstream in their primary region
of business. KPMG believes that exploding smartphone growth, new
applications, and economic opportunities will grow mobile payments at a
much faster rate than our respondents anticipate.
Mobile payments will take multiple forms. We asked respondents to
assess five forms of mobile payments m-wallet, m-banking, contactless
card systems, online payment systems and carrier billing.
Respondents identified m-banking and online payments systems (such as
PayPal, Boku, Obopay) as either mainstream today or likely to gain
traction.
While KPMG believes that these forms of mobile payments will all gain
some traction, our view is that m-wallets is one of the most exciting
and promising payment opportunities. M-wallets provides the momentum to
move beyond payments to participate in the entire chain of mobile
commerce from brand awareness to consideration, followed by after-sales
loyalty and care.
Convenience and availability will drive success. Whether assessing
the supply or demand side for mobile payments, respondents agreed that
these two factors are the key advantages.
Respondents recognize that convenience and availability are critical
requirements in changing consumer behaviour.
Security is the prime impediment. No surprise, certainly, that
security is critical where customers' money is at stake.
However, we believe that convenience, availability and ease of use
are fundamental to the success of an activity as basic and widely
adopted as payment.
Consumers will not adopt new payment solutions each time they
encounter a new merchant.
Companies participating in the mobile payments ecosystem may
overestimate their ability to make mobile payments as convenient,
ubiquitous and easy to use as current solutions. In doing so, they risk
failing to deliver on the promise of mobile payments.
The mobile payments ecosystem will be rich and dynamic. Irrespective
of which industry the respondent's business is in, they believe that
many other industries will play an important role.
Financial services firms and credit card companies will be the most
influential, followed closely by telecom operators.
While companies deem technology companies and retailers less
influential, new business models driven by these sectors are changing
the game at a fast pace.
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