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300 Billion Transactions Worth $860 Billion by 2013, Says Informa Telecoms

Informa Telecoms & Media forecasts that in 2013 almost 300
billion transactions, worth more than US$860 billion, will be conducted
using a mobile phone - a twelve-fold increase in gross global
transaction values in just five years.

"The mobile payments and banking market has evolved considerably
over the last two years. Major industry initiatives led by the GSMA and
significant commitments to the market from major financial services and
telecoms leaders have changed the dynamics of this market," says John
Darnbrough, Associate, Informa Telecoms & Media and author of the
Mobile Payments and Banking report. "At last there is real evidence of
demand for these services, some from the unlikeliest of places such as
the emerging markets of Africa and Asia. The prospects for growth and
the emergence of new opportunities in mobile financial services are
encouraging more players to enter the market." This comprehensive
report defines and analyses the mobile payments and mobile banking
market, looking individually at four key sub-markets: remote mobile
payments, local (NFC) mobile payments, mobile banking and mobile money
transfer (MMT).

Remote Mobile Payments Informa predicts that by 2013, over 445
million mobile subscribers will be regularly using their mobile phone
to purchase physical goods and services remotely. Furthermore, Informa
estimates that of the total value of mobile payments and transactions
in 2008 - around US$71 billion - approximately a third was spent on
purchases of mobile digital content such as ringtones, games and music
tracks, but by 2013 over 95% of mobile transactions will be for
physical goods and services.

Local (NFC) Mobile Payments The report also analyses developments in
mobile NFC technologies, business models and the results of recent
market trials and concludes that despite its promise the mobile NFC
market will be held back by the lack of availability of NFC enabled
handsets and uncertainties regarding the business model and business
case for mobile NFC. Nevertheless, Informa forecasts that in 2013
approximately 11% of all mobile handsets shipped will be NFC enabled
and that over 178 million mobile subscribers will be regularly using
mobile NFC phones to buy physical goods and services, such as tickets,
locally at the point of sale.

Mobile Banking The report examines the trend of banks in developed
markets utilizing the mobile phone as another channel to market for
their existing services and the emergence of mobile enabled 'branchless
banking' services for 'unbanked' consumers in developing markets. It
forecasts that by 2013 there will be 977 million users of mobile
banking services worldwide a dramatic increase from approximately 67
million at the end of 2008.

Mobile Money Transfer The report also looks at the evolution of the
mobile money transfer market, primarily driven by the requirements of
migrant workers from emerging markets. By 2013 Informa forecasts that
almost 424 million consumers will be sending over US$157 billion of
personal funds via mobile domestically whilst a further 73 million will
be sending US$48 billion of funds via mobile internationally.

The research for the report identifies a number of drivers and
enablers that are creating an environment more conducive to the
development of the mobile payments and banking market. Mobile phone and
network technologies are now more sophisticated and more mature than
ever before and, thanks to industry initiatives, more coordinated and
standardized. Regulatory authorities are being empowered by national
and regional government agencies to take a more 'enlightened' approach
to this market - particularly in developing markets where it is
recognized that mobile banking and mobile money transfer services can
facilitate and encourage economic growth in the poorest and most
deprived regions. Consumers are becoming more familiar with the use of
the mobile phone for applications beyond calls and are more confident
in the use of electronic commerce (via their experience of online
shopping). Furthermore, there are signs that the key players in the
ecosystem are now more prepared to collaborate and invest in creating
the systems, infrastructure and consumer confidence necessary to ensure
this market thrives.

However, uncertainties still exist, not least the potential impact
of the global financial market melt-down that has suddenly gripped the
world economy in the last few months. With the banking sector in
crisis, industry and consumer confidence has been dealt a hammer blow
that will potentially severely limit spending in all parts of the
economy - reducing investments in new services and infrastructure, and
reducing the consumer spending needed to drive revenues from these new
services.

Yet these new technologies and service opportunities do offer the
potential to make real cost reductions, attract and retain customers
and potentially drive new revenue growth and profit opportunities for
mobile operators, banks and credit card companies. The opportunity
still exists for the mobile and financial services industries to
exploit technological innovation, regulatory reform and changing
consumer behavior and perceptions to create a new commercial paradigm
and transform how consumers purchase products, exchange money and
manage their finances.

In the developed world, the behavioral change, in both business
practices of the financial institutions and of consumers themselves,
will happen slowly, probably as a consequence of the adoption of
proximity (NFC-based) payments and increasing use of the adjuncts to
mobile payments such as mobile marketing and advertising. Once the full
'leather wallet' analogy is achieved by the mobile wallet - with the
mobile phone holding multiple 'virtual' accounts or cards, including
loyalty cards as well as ad-hoc discounts (vouchers), and other
applications such as 'mTickets' and 'mAccess control' - mobile payments
and mobile banking will become fully integrated in the consumer's
lifestyle. However, Informa Telecoms & Media expects that this new
paradigm will not be widespread until the end of the forecast period of
this report - around 2012/13.

According to Darnbrough, "in the developing world, the behavioral
change amongst consumers has already begun; mobile payments and mobile
banking are already the natural and only financial services to millions
of previously unbanked consumers. Although the market will look
differently in the developing world - few mobile NFC deployments, for
example - it will lead the world in the use of mobile payments and
banking." The report concludes that the mobile phone will inevitably
become embedded in the financial services' infrastructure and be
accepted as a natural means of payment by the consumer. However,
Darnbrough cautions that this will not happen overnight, and that it
will not happen in isolation. "It will require unprecedented levels of
collaboration and coordination between two very different industries.
There is a strong appetite for these new business opportunities but the
key players - mobile operators, banks and credit card companies - must
acknowledge and take advantage of each other's respective strengths,
and work together to overcome the remaining barriers rather that
attempt to control everything on their own." Informa predicts that if
the key players collaborate effectively the mobile payments and banking
market offers a shared annual revenue opportunity of over US$10 billion
in five years time. The biggest revenue opportunity is expected from
mBanking services, which Informa predicts will be worth US$5.5 billion
in 2013.