The number of mobile payment users worldwide will reach 245.2 million in 2013, up from 200.8 million in 2012, while worldwide mobile payment transaction values will reach $235.4 billion in 2013, a 44 percent increase from 2012 values of $163.1 billion, according to a report from IT research firm Gartner.
Money transfers and merchandise purchases are expected to account for about 71 percent and 21 percent of total transaction value in 2013, making them the largest contributors by far. However, on a worldwide scale, the report noted people are not purchasing as much because the buying experience on mobile devices has yet to be optimized. Currently, people are spending less money through mobile devices than through online e-commerce services and at retail outlets. Merchandise purchases account for about 23 percent of the total value forecast for 2017, Gartner analysts projected.
"We expect global mobile transaction volume and value to average 35 percent annual growth between 2012 and 2017, and we are forecasting a market worth $721 billion with more than 450 million users by 2017," Sandy Shen, research director at Gartner, said in a statement. "Nevertheless, we have lowered the forecast of total transaction value for the forecast period due to lower-than-expected growth in 2012, especially in North America and Africa."
North America's transaction value is forecast to grow 53 percent in 2013, reaching $37 billion, up from $24 billion in 2012. The region has been impacted by low adoption of near field communication (NFC) payment services and many merchants launching mobile apps in a copycat fashion, but lack a clear strategy to make implementation successful.
NFC technology shipped on more than 106 million Google Android smartphones in 2011, and with the backing of an iPhone, and that number is expected to grow to more than 989 million smartphones by 2016, according to a recent IHS iSuppli report.
However, Gartner forecast that NFC would account for only about 2 percent of total transaction value in 2013 and 5 percent of the total transaction value in 2017, although growth is expected to increase somewhat from 2016 when the penetration of NFC mobile phones and contactless readers increases.
The report noted the technology’s value has been reduced by more 40 percent throughout the forecast period due to disappointing adoption of NFC technology in all markets in 2012 and the fact that some high-profile services, such as Google Wallet and Isis, are struggling to gain traction.
"Money transfer value continues to increase because users are transacting much more frequently (although at lower values) due to the wider availability of services and to transaction costs that are lower than those of traditional bank services," the report noted. "This makes money transfer a leading use case, one that Gartner forecasts to account for almost 69 percent of the total value in 2017."