Mobile commerce set for rapid growth

09 April 2012

LONDON: Mobile commerce is set to witness a rapid surge in worldwide revenues in the coming few years, a forecast has predicted.

According to estimates from KPMG, the business services firm, the global value of transactions completed via this route will rise by 97% per annum in the next three years, thus hitting £591bn in 2015.

Totals are due to cross the £100bn threshold over the course of 2012, before then surpassing £200bn in 2013 and scaling £400bn in 2014, the analysis suggested.

As part of the process, SMS will see its proportions of revenues fall from 72.1% in 2010 to 52.3% in 2015.

By contrast, near field communications, facilitating contactless or "tap and pay" transactions, should post an improvement in share from 17.6% to 37.2% in this period.

Rising smartphone uptake will fuel progress, with the share of global handset shipments attributable to these devices making up 28.1% of the total, or over 320m units, in 2011, versus 12.7%, or 150m units, in 2008.

More specifically, shipment numbers for mobile phones boasting NFC capabilities were pegged at some 44m in 2011, and to reach 630m in 2015. By the latter date, 75% of these gadgets will be smartphones.

"Growth in the m-payments marketplace will be driven by customers' increasing need for convenience and the development of a raft of new applications enabling commerce in the palm of our hands," said David Hodgkinson, senior manager in KPMG's customer and channel consulting team.

Google Wallet, introduced in September 2011 by Google in partnership with MasterCard, Sprint, First Data and Citi, was cited as a major example of such a trend.

Brand owners in numerous key categories are also displaying considerable optimism about the potential of mobile payments, KPMG found after surveying 868 corporations in various industries.

The result showed that 76% of technology firms viewed mobile payments as "very" or "reasonably" important, as did 74% of financial services providers, 72% of telcos and, perhaps crucially, 78% of retailers.

"There is certainly scope for collaboration between smart-phone manufacturers, telecom companies and retailers but the big, unanswered question revolves around who the customer will trust with their data and their m-cash," Gerry Penfold, a partner at KPMG Risk Consulting, said.

"Clearly, though the winners will be the companies that can provide the richest consumer experience with the greatest convenience."

Data sourced from KPMG; additional content by Warc staff