M-Commerce Market to grow to $40bn fuelled by micropayments

Large numbers of small payments will make up the vast majority of sales via mobile phones, with the average Western European making approximately 28 transactions a year via the mobile phone by 2009. The average cost of each transaction in 2009 in Western Europe is expected to be worth approximately $3. Whilst the current m-commerce market is dominated by digital goods such as mobile entertainment (ringtones, games, wallpaper, gambling and so on), other markets such as ticket purchases, retail, and person to person payments will emerge as additional application areas, with revenues totalling $39bn by 2009. The purchase of tickets (such as car parking and cinema tickets) using the mobile phone, will dominate the growth in m-commerce. Mobile users have started already to show interest in ticketing particularly in Europe and Japan, while in the retail sector, initial applications are geared towards vending machines, but this will see slow growth. The report also reveals that: - Ticket purchases will emerge as a major application area by 2007 with revenues totalling $39bn by 2009. - Retail Point of Sale (POS) mobile transactions will be slow and be worth only $299m by 2009. - RFID and Infra Red technologies are likely to have major influence on future developments of mobile as a payment device. - The development of global standards will continue to be slow due to too many industry bodies concentrating on vested interests. Mobile commerce is slowly starting to happen, driven by the demand for ringtones and games but also increasingly music downloads. Other applications too will start to emerge, such as ticketing and these are applications that mobile users can understand as they start to explore more uses for their increasingly powerful handsets. The key for m-commerce growth is simplicity. Will it be easier to use than a credit card for example? Can it ever be more convenient than cash? Ultimately the success or failure of mobile commerce, either macro or micro payments, will come down to this.