SECURITY

Cash, Credit or Smartphone?

Alison Diana | Date: 11-11-11 | Comments

Consumers and business users seek alternatives to traditional payment options. Secure and speedy mobile payments are expected to expand beyond downloadable sales.

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Cash, Credit or Smartphone?
Mobile payment solutions, which consumers typically use to purchase downloaded files, such as videos or games, are expected to become more widespread, expanding beyond e-commerce sites and into traditional brick-and-mortar stores where they could compete against credit cards and cash.

This year, worldwide mobile payment users are expected to spend $86.1 billion, up 75.9 percent from last year�s payment volume of $48.9 billion, according to a July 2011 report from Gartner. The number of people using mobile payment options will surpass 141.1 million in 2011, an increase of 38.2 percent, compared with last year�s tally of 102.1 million, the research firm said.

Juniper Research estimates the overall market for mobile payments for digital and physical goods, money transfers and near-field communication (NFC) transactions will reach $670 billion by 2015 versus $240 billion in 2011.

The Starbucks Android app allows coffee-lovers to pay for their purchases using their smartphone.

"Our analysis shows that emerging segments such as physical goods payments, NFC and money transfers will fuel market growth by a factor of 2.7 times by 2015. Digital goods is the largest segment and, although forecast to more than double, it is not growing as quickly as some of the newer segments,� David Snow, senior analyst at Jupiter, said in a statement.

Unlike NFC transactions like Google Wallet, which typically are backed by credit cards, some mobile payment solutions are backed by cell phones�for example, customers approve purchases and the bill appears on their monthly cell phone statement.

�We provide online merchants with the opportunity to accept payments through cell phone bills,� Kolja Reiss, managing director of mopay, said in an interview.

Mopay, the mobile messaging and payment unit of MindMatics AG, works with many telecommunications firms around the world, and is involved in discussions with leading cell service providers such as AT&T, Verizon and T-Mobile in the United States, said Reiss. In addition to expanding its service to the nation�s leading mobile telecommunications companies, mopay also wants to increase the amount of money consumers can charge via their phone bills, he said.

�We�re confident in the next 12 months you�ll be able to pay for purchases of up to $250 on your cell phone bill,� said Reiss, of the negotiations with U.S. providers.

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