The number of remote mobile payment users buying digital and physical goods will reach 2.5 billion by 2015, according to a July 2011 white paper from Juniper Research. Data from “The Good, the Payments and the Mobile” indicates this will represent 40% growth from 1.8 billion users this year.
North America Will Dominate Remote Payment
Looking at projections of where digital goods remote payment users will live in 2015, the white paper predicts that North America will be the dominant region. North America will be followed by the Indian Subcontinent, with the other major global regions of Latin America, Western Europe, Central/Eastern Europe, Far East/China, rest of Asia-Pacific, and Africa/Middle East dividing the remainder of the global market into roughly equal shares.
Juniper notes that remote mobile payment for digital goods is much more established in all eight major global regions than remote mobile payment for physical goods.
Remote Mobile Payment Differs from POS Mobile Payment
The white paper defines remote mobile payment as when the storefront or retailer is remote to the mobile user, such as paying for digital goods by premium rate SMS or buying physical goods from a mobile web-enabled retailer. Meanwhile, a proximity or POS mobile payment is when the storefront or retailer is physical and the user is located at or near to it.
Major Remote Mobile Payment Schemes
The white paper identifies eight major remote mobile payment schemes:
1. “Direct to Bill” (D2B): Offered by mobile phone operators, this system is offered to account holders as an alternative to credit or debit card accounts and can also be offered as an alternative to credit or debit card payments for online purchases, typically with a one-time SMS-based authorization code.
2. Premium Rate SMS (PSMS): Merchants and retailers can offer services via SMS, with a premium rate charged for each SMS sent by the consumer and the merchant/retailer taking a share of the revenue, which is charged to the consumer’s mobile phone bill.
3. Mobile Web/WAP Billing: Similar to payment on standard e-commerce sites, this form of remote mobile payment involves payment by traditional methods such as credit or debit card.
4. SMS/Java/SIM Toolkit: Mobile payment is initiated using SMS and funds are transferred from a registered account or mobile wallet.
5. Person-to-Person (P2P): P2P payments involve the transfer of funds between individual mobile users.
6. Smartphone Apps: Numerous apps enable mobile payment by credit card or other consumer accounts.
7. Contactless Payment: A Near Field Communications (NFC) chip is embedded into the phone and interacts with a payment application that is preloaded into the phone or downloaded over the air. The phone is then waved near a contactless reader to execute the transaction.
8. In Store: Mobile is increasingly being offered as an alternative payment platform in physical stores.
N. America, W. Europe to Dominate NFC Market
North America and Western Europe will be the two dominant players in the global near field communications (NFC) smartphone market in 2014, according to an April 2011 white paper from Juniper Research. “Hitting the N-Mark in NFC” predicts the NFC smartphone market will approach 300 million devices by that time.