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Mobile Payments Shows Mixed Fortunes
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2/6/01
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New research in Forrester’s "Mobile Payment's Slow Start" study shows that, despite retailers' enthusiasm for mobile phone payments, the marketplace itself is less enthusiastic. The findings actually reveal that consumers don't want it, providers can't offer it, and the present day technology can't support it.
Forrester’s report contains a forecast model of mobile payment in Europe, drawing on consumer spending data from organisations such as the ECB and Eurostat. The model projects that total mobile payment will amount to only Euro 26 billion in 2005, or Euro 87 per mobile phone user per year.
In addition, the report details that, while payment for mobile content dominated last year's market at some Euro 51 million, the market will shift to low-value mobile payments by about 2003. This will largely focus on such items as vending machine payments. The market may finally move towards higher-value mobile payments, such as supermarket grocery payments, by around 2005.
At the premium end of the mobile payments range, Forrester expects only Euro 27 million to arise from higher-value payments for goods like CDs. Low-value mobile payment for PC-based Internet content, like pay-per-use news articles, will probably never take off.
Looked at by EU country, the analysts speculate that Belgium, France, Greece, Luxembourg and Spain will adopt mobile payment at the slowest rate, averaging Euro 3.47 per mobile user per month in 2005. On the other hand, Austria, Ireland, Italy, the Netherlands, Portugal, Switzerland and the UK will probably see an average spend of Euro 6.77 per mobile user per month by then. The Nordic countries and Germany are set to lead the EU in mobile payment adoption, averaging spend of Euro10.90 per month in 2005.
"While online and brick-and-mortar retailers believe that mobile payment will account for 10% of their transaction value in three years, Forrester believes this is actually at least a decade away," said Michelle de Lussanet, analyst at Forrester. "Three barriers will limit the penetration of mobile payment for the next five years: consumers aren't ready to change their payment behaviour; providers will continue to resist collaborating on full-featured services; and easy-to-use, cheap, secure, and standardised technology will take years to roll out. Also, European consumers don't trust a mobile payment system and have historically resisted attempts to change their payment habits."
Part of the report’s research was based on trade interviews with 50 European retailers earlier this year.
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