Mobile payments to increase 44% this year, Gartner predicts

Gartner said that it expects global m-payment transactions to rise from the $163.1bn recorded in 2012 and that it also expects the number of individuals making such transactions to increase from 200.8 million last year to 245.2m in 2013. The company said that it anticipates continued growth in the m-payments market to 2017.

Gartner said that m-payments in Western Europe should reach $29 billion for 2013, compared to $19bn in 2012. However, it said that "the average number of transactions per user" fell in 2012 and that this, combined with the fact that "several services struggled and others launched only toward the end of the year" meant that growth in the market was "postponed ... for at least a year".

Africa is currently the biggest market for m-payments in terms of the transaction values recorded but Asia/Pacific will emerge as the largest market in 2016, when the value of m-payment transactions in the region is expected to reach $165bn, it added.

"We expect global mobile transaction volume and value to average 35% annual growth between 2012 and 2017, and we are forecasting a market worth $721 billion with more than 450 million users by 2017," Sandy Shen, research director at Gartner, said in a statement. "Nevertheless, we have lowered the forecast of total transaction value for the forecast period due to lower-than-expected growth in 2012, especially in North America and Africa."

Gartner said that there had been "disappointing adoption" of 'Near Field Communications' (NFC) technology in 2012 and that this had contributed to it lowering its transaction value forecasts for m-payments through NFC in the next five years "by more than 40%". NFC technology allows devices to interact via radio communication when in close proximity to one another.

However, Gartner said that it expects m-payments made via NFC will reflect 5% of the value of all transactions in 2017, compared to the 2% it has predicted for this year.

"Growth is expected to increase somewhat from 2016 when the penetration of NFC mobile phones and contactless readers increases," it said.

Retail expert Tom Leman of Pinsent Masons, the law firm behind Out-Law.com, recently said that retailers must invest in contactless payment and other new payments technologies if they wish to maintain their share of consumer spending in future.

"The decline in the use of cash and credit cards requires the retailer to innovate to keep its share of the retail wallet," Leman said. "Some retailers already need to spend money on infrastructure to stay ahead and the rise of the alternative payment systems highlights that further. Those retailers that embrace the change and invest in their hardware and software will benefit in the long run."