Mobile payments market thriving despite higher expectations

As more people adopt mobile devices, including smartphones and tablets, the market for mobile payments is expected to increase as well.

According to a recent study by research firm Gartner, worldwide mobile payment users are projected to reach 141.1 million users this year, which is an increase of 38.2 percent from last year. While the increase of users is indeed impressive, the global mobile payments market will surpass $86 billion, growing by nearly 76 percent from the $48.9 billion spent in 2010.

Although these measurements appear to be increasing rapidly, the overall mobile payments market is actually growing slower than Gartner previously expected.

"In developing markets, despite favorable conditions for mobile payment, growth is not as strong as was anticipated," Gartner research director Sandy Shen. "Many service providers are yet to adapt their strategies to local requirements, and success models from Kenya and the Philippines are unlikely to be translated to other markets."

Another hindrance to the slower growth for the mobile payments market is due to near field communications. According to Gartner, companies in developed regions do not fully comprehend the complexity of a NFC model.

"We believe mass market adoption of NFC payments is at least four years away," Shen said. "The biggest hurdle is the need to change user behavior by convincing consumers to pay with mobile phones instead of cash and cards."

In developing countries, the use of short message service and unstructured supplementary service data are expected to be the most used access technologies. According to Gartner, this is because of the limitations of mobile phones in these markets.

For developed countries, the wireless application protocol will remain the No. 1 access technology used, with mobile application downloads and payments accounting for approximately 90 percent of all mobile transactions in North America and 70 percent in Western Europe this year.

"Thanks to the success of mobile application stores, such as Apple's App Store, and the efforts in driving mobile sales by major retailers, such as Amazon and eBay, merchandise purchases far outweigh other use cases in developed markets," Shen added.

The mobile payments market is considered a top priority for many worldwide organizations. According to a recent study by KPMG International, 72 percent of respondents said mobile payments are or will be important in the future and nearly 60 percent said their organizations already have a mobile plan in place.