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Mobile phone payments 4/25 finextra The number of people making payments using their mobile phones globally is set to soar from 32.9m in 2008 to 103.9m in 2011. Gartner says SMS text messages will continue to be the dominant channel for mobile payments, although take up of wireless application protocol (WAP), unstructured supplementary service data (USSD) & NFC contactless services will grow. But despite the rapid take-up, Sandy Shen, Gartner, is cautious about revenue opportunities that m-payments offer for banks & claims mobile operators have more to gain from the technology. ‘Banks can justify the investment if they look at mobile as an extension of their existing channels & bundle payments with additional banking services.’ Mobile payments are most likely to succeed in developing markets where many people are ‘unbanked’ & there are few payment options. The service is set to be seen as just an extension of existing options in developed markets. Shen warns banks may be hit by offerings from non-financial institutions like Obopay & PayPal, which are more proactive & offer better & cheaper services. ‘These could threaten the lucrative card business should momentum build up.’ Asia Pacific dominates the mobile payments field, with a projected 28m users in 2008 - 85% of the worldwide total. North America users are expected to hit 1m this year while Western Europe is expected to have 499,000 users. Asia Pacific will continue to lead the way on mobile payments for the future, especially with the emergence of massive markets in India & China. Western Europe & North America lag mainly because of a more established payments infrastructure & greater concern over security. However, Gartner says NFC-based contactless technology may provide a breakthrough in these markets because of the convenience it offers & its ‘cool factor’. A study from Javelin is optimistic on the prospect of NFC-enabled mobile payments, but warns industry players must work together to drive adoption. ‘Tap-&-go contactless payments will pave the way for cell phones & handheld computers to become ‘electronic wallets,’ packed with consumers’ payment & merchant cards, coupon offers, even medical records, family pictures & more,’ says James Van Dyke, Javelin. ‘But consumers won’t benefit until the primary players - card networks, financial institutions, mobile carriers, merchants & handset manufacturers - work together toward a unified, simple solution that lets everyone win.’