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Mobile Payments Strategies

Mobile Payments Strategies

NFC, Remote Purchases & Money Transfer 2012-2017

Publisher: Juniper Research
Date Published: 15/08/2012
Category: Mobile Commerce
No of Pages: 126
Coverage: Global ~ 8 Key Regions
 

Overview

• Payments Ecosystem Evolution Analysis
• mPayment Strategic Options Assessed
• Transactions Values Forecast and Explained

The highly anticipated 5th edition of this industry-leading report provides an analysis of the rapidly expanding mobile payments market, highlighting the key sectors for service growth and the new business models which are reshaping the way that content is monetised.

This report covers

Challenges Across The Value Chain. This report explores the critical issues facing operators, financial institutions and merchants, including:

• Monetising the NFC opportunity
• User readiness for mPayment solutions
• Regulatory hurdles
• The tablet effect

The report also offers an in-depth exploration of the elements shaping this fast-moving sector, looking at the key factors driving growth and the constraints on current – and future – service deployments and user adoption. This analysis is supported by interviews with senior executives from players across the mPayments ecosystem, including Bango, CorFire, Fundamo, Gemalto and Nokia.

Market forecasts. This report brings together in a single volume the key five-year mobile transaction forecasts from across Juniper’s latest sector-specific reports:

• Digital & Physical Goods
• Money Transfer
• NFC Mobile Payments

These forecasts are combined to provide the total annual value of transactions conducted via mobile handsets, tablets and eReaders.

In all, the report features 16 forecast charts and tables, split by 8 key regions (North America, Latin America, Western Europe, Far East & China, Indian Subcontinent, Rest of Asia Pacific and Africa & Middle East). It also includes a series of strategic recommendations for players across the mPayments value chain.

Table of Contents

Executive Summary
1. Mobile Commerce in Context

1.1 Introduction 16
1.1.1 Synopsis 16
1.1.2 Report Scope 17
1.2 Defining the Mobile Commerce Market 17
1.2.2 The ‘Holy Grail’ of Mobile Retail Marketing & Payments 19
i. Case Study - Mobile at the Heart of Retail: eBay 20
Figure 1.2: eBay Mobile Transaction Volumes ($m), By Billing Mechanism, 2008 – 2012 20
a. Developing the “couch commerce” revenue opportunity 21
b. PayPal: from Remote Payments to POS Opportunities 21
1.3 The mPayment Transaction Lifecycle 22
Figure 1.3: mCommerce Payment Process 22

2. mPayments Trends, Drivers & Constraints

Figure 2.1 Major Trends, Drivers & Constraints Across Mobile Payments 25
2.1 Trends in the Remote Payments Space 25
2.2 Key Trends in the Contactless Payments Market 28
Figure 2.2: NFC Mobile Ticketing Market Synergies 30
2.3 Remote Payments Drivers 30
Figure 2.3: Remote Payments Drivers 31
2.3.1 Device Drivers 31
Figure 2.4: Smartphone Shipments (million) Split by 8 Key Regions, 2007 – 2012 32
Figure 2.5: Tablet Shipments (m), iPad/Other, 2009 – 2011 34
2.3.2 Brand/Retail Drivers 34
Figure 2.6: B2C eCommerce Sales ($bn), Split by 8 Key Regions, 2001 & 2011 35
Table 2.1: B2C eCommerce Sales ($bn), Split by 8 Key Regions, 2001 & 2011 35
2.3.3 MNO Drivers 36
Figure 2.7: Operator-billed Monthly ARPU ($) Split by 8 Key Regions, 2005 – 2011 37
2.3.4 Consumer-Led Drivers 38
2.4 Drivers for Contactless Payments 40
Figure 2.8: Ericsson Networked Society City Index 42
2.5 Constraints on the Remote Payment Opportunity 43
2.6 Constraints on the Contactless Payment Market 51

3. Payment Mechanisms and Operator Opportunities

3.1 Introduction 55
3.2 Mobile Payment Mechanisms: Classification, Opportunities & Challenges 55
Table 3.1: Mobile Payment Classification 56
3.2.1 Premium Rate SMS (PSMS) 56
i. Advantages of PSMS Payment 57
ii. Disadvantages of/Constraints on PSMS Payment 57
3.2.2 Mobile Phone Bill – “D2B” (Direct to Bill) Payment 58
Table 3.2: Accredited Payment Intermediaries by UK Operator, mid-2012 59
i. Moving towards standardisation: the PayPal Carrier Payment Network 59
ii. Direct-to-mobile In-App Billing 60
3.2.3 Mobile Web & WAP Billing 60
i. Case Study: Payforit 61
3.2.4 SMS/Java/SIM Toolkit 61
3.2.5 Billing the Smartphone Application 62
3.2.6 Contactless Payment 62
Figure 3.1: NFC Retail Payments Logical Architecture 63
i. NFC Controller 63
ii. Secure Element 63
iii. Application Environment 63
iv. User Interface 64
v. Wide Area Modem 64
vi. Contactless Payment (POS) Terminal 64
3.2.7 In Store 64
Figure 3.2: Mocapay Mobile Commerce Platform 64
3.3 Identifying and Maximising the Operator Opportunity 65
3.3.1 Potential Benefits of mPayments 65
i. Reduced Churn 65
ii. Increased ARPU 66
a. Case Study: Safaricom M-PESA 66
i. Service Description 66
ii. Service Statistics 67
Figure 3.3: Safaricom Data Revenues (KES bn) Split by Broadband, M-PESA & SMS  H1 2009 – H1 2012 67
iii. Service Developments 68
iv. Increased B2B Revenues 68
Figure 3.4: PaaS Double-Sided Business Model 69
3.3.2 Maximising the Potential: Developing Operator Strategies for Mobile Payments 69
i. Leveraging the Billing Relationship 69
a. Opening up the APIs 70
ii. New Business Models: The Shelf-in-Store 70
iii. Monetising Money Transfer 71
a. The Third Party Opportunity 71
b. Barriers to Co-Operation: The Banks’ Perception 72
iv. Monetising the NFC Opportunity 73
a. MNOs and the SIM SE 73
b. MNO Example: ISIS 73
Figure 3.5: ISIS MNO-led Consortium Positioning 74
Figure 3.6: ISIS Mobile Wallet Screenshot & Retailer Logo 74
c. Conclusion 75

4. Mobile Payments Forecasts


4.1 Methodology 77
4.1.1 Approach and Assumptions 77
Figure 4.1: Market Forecast Methodology 78
4.2 Global Mobile Device Forecast 79
Figure 4.2: Mobile/Nomadic Device Installed Base (m) Split by Device Type, 2012 – 2017 79
Table 4.1: Mobile/Nomadic Device Installed Base (m) Split by Device Type, 2012 – 2017 80
4.3 Mobile Payment Market Forecasts 80
4.3.1 Remote Payments for Digital and Physical Goods 80
i. Digital Goods 80
Figure 4.3: Total Remote mPayment Gross Transaction Value for Digital Goods ($m) Split by 8 Key Regions, 2012 – 2017 81
Table 4.2: Total Remote mPayment Gross Transaction Value for Digital Goods ($m)  Split by 8 Key Regions, 2012 – 2017 81
a. Understanding the Remote Digital Plateau: The NFC Migration 82
Figure 4.4 The NFC Effect: mTicket Transaction Migration from SMS/Barcode to Contactless, North America and Western Europe, 2012 – 2017 82
ii. Physical Goods 82
Figure 4.5: Total Remote Transactions from Mobile/Nomadic Devices ($m) Split by 8 Key Regions, 2012 – 2017 83
Table 4.3: Total Remote Transactions from Mobile/Nomadic Devices ($m) Split by 8 Key Regions, 2012 – 2017 83
Figure 4.6: mCommerce vs “Fixed” eCommerce (%), by 8 Key Regions 2017 84
Table 4.4: mCommerce vs “Fixed” eCommerce ($m), by 8 Key Regions 2017 84
a. The Rising Profile of the Tablet as an eCommerce/mCommerce Vehicle 84
Figure 4.7: Total Remote Transactions from Mobile/Nomadic Devices ($m) Split by Handsets & Tablets, 2012 – 2017 85
Table 4.5: Total Remote Transactions from Mobile/Nomadic Devices ($m) Split by Handsets & Tablets, 2012 – 2017 85
iii. Digital and Physical Goods Combined 85
Figure 4.8: Global Remote mPayment Market: Gross Merchandise Sales Transaction Value ($m) Split by 8 Key Regions, 2012 – 2017 86
Table 4.6: Global Remote mPayment Market: Gross Merchandise Sales Transaction Value ($m) Split by 8 Key Regions, 2012 – 2017 86
a. Gross Merchandise Sales Market Segmentation 86
Figure 4.9: Global Remote mPayment Market: Gross Merchandise Sales Transaction Value (%) Digital vs. Physical Goods Comparison, 2012 – 2017 87
Table 4.7: Global Remote mPayment Market: Gross Merchandise Sales Transaction Value (%) Digital vs. Physical Goods Comparison 2012 – 2017 87
4.3.2 NFC 87
i. NFC Retail Payments 87
Figure 4.10: Total Value of NFC Retail Payments Transactions ($m)  Split by 8 Key Regions, 2012 – 2017 88
Table 4.8: Total Value of NFC Retail Payments Transactions ($m)  Split by 8 Key Regions, 2012 – 2017 89
ii. NFC Ticketing 89
Figure 4.11: Total Transaction Value of NFC Tickets p.a. Split by 8 Key Regions, 2012 – 2017 89
Table 4.9: Total Transaction Value of NFC Tickets ($m) p.a.  Split by 8 Key Regions, 2012 – 2017 90
iii. Total NFC Transaction Payments 90
Figure 4.12: Total Mobile NFC Transaction Values ($m) p.a. Split by 8 Key Regions,  2012 – 2017 90
Table 4.10: Total Mobile NFC Transaction Values ($m) p.a. Split by 8 Key Regions,  2012 – 2017 91
4.3.3 Mobile Money Transfers 91
Figure 4.13: Total Value of All Mobile Money Transfers ($m) p.a. Split by 8 Key Regions, 2012 – 2017 91
Table 4.11: Total Value of All Mobile Money Transfers ($m) p.a. Split by 8 Key Regions,  2012 – 2017 92
Figure 4.14: Comparison of Domestic, Sophisticated Financial Services & International Mobile Money Transfer Transaction Values (% of total), 2012 – 2017 93
Table 4.12: Comparison of Domestic, Sophisticated Financial Services & International Mobile Money Transfer Transaction Values (% of total), 2012 – 2017 93
4.3.4 Total Mobile Payment Market 93
i. Regional Split 93
Figure 4.15: Total Mobile Payment Market ($m) Split by 8 Key Regions, 2012 – 2017 93
Table 4.13: Total Mobile Payment Market ($m) Split by 8 Key Regions, 2012 – 2017 94
Figure 4.16: Total Mobile Payment Market (%) Split by 8 Key Regions, 2012 – 2017 95
Table 4.14: Total Mobile Payment Market (%) Split by 8 Key Regions, 2012 – 2017 95
ii. Market Segment Split 96
Figure 4.17: Total Mobile Payment Market ($m) Split by Digital & Physical Goods, NFC & Mobile Money Transfers, 2012 – 2017 96
Table 4.15: Total Mobile Payment Market ($m) Split by Digital & Physical Goods, NFC & Mobile Money Transfers, 2012 – 2017 96
iii. Comparison with Previous Forecasts 96
Figure 4.18: Forecast Comparison: Mobile Payments, Global Transaction Values ($bn), 3rd Edn (2011) vs 4th Edn (2012) 97
Table 4.16: Forecast Comparison: Mobile Payments, Global Transaction Values ($bn), 3rd Edn (2011) vs 4th Edn (2012) 97

5. Vendor Profiles

5.1 Accenture 100
i. Corporate 100
ii. Geographic Spread 100
iii. Key Clients & Strategic Partnerships 101
iv. High Level View of Offerings 101
v. Juniper’s View: Accenture Key Strengths and Strategic Development Opportunities 102
5.2 Aepona 102
i. Corporate 102
ii. Geographic Spread 102
iii. Key Clients & Strategic Partnerships 103
iv. High Level View of Offerings 104
Figure 5.1: Aepona API Monetisation Concept Schematic 105
v. Juniper’s View: Aepona Key Strengths and Strategic Development Opportunities 105
5.3 Bango 106
i. Corporate 106
ii. Geographic Spread 106
iii. Key Clients & Strategic Partnerships 106
iv. High Level View of Offerings 107
v. Juniper’s View: Bango Key Strengths and Strategic Development Opportunities 107
5.4 CorFire 107
i. Corporate 108
ii. Geographic Spread 108
iii. Key Clients & Strategic Partnerships 108
iv. High Level View of Offerings 109
v. Juniper’s View: Corfire Key Strengths and Strategic Development Opportunities 109
5.5 Ericsson 109
i. Corporate 109
ii. Geographic Spread 109
iii. Key Clients & Strategic Partnerships 110
iv. High Level View of Offerings 110
Figure 5.2: Ericsson TSM leveraging IPX Managed Service 110
v. Juniper’s View: Ericsson Key Strengths and Strategic Development Opportunities 110
5.6 Fundamo/Visa 111
i. Corporate 111
ii. Geographic Spread 111
iii. Key Clients & Strategic Partnerships 112
iv. High Level View of Offerings 113
v. Juniper’s View: Fundamo Key Strengths and Strategic Development Opportunities 114
5.7 Gemalto/Netsize 114
i. Corporate 115
ii. Geographic Spread 115
iii. Key Clients & Strategic Partnerships 116
a. NFC 116
b. Money Transfer 117
c. Remote Payments 117
iv. High Level View of Offerings 117
d. NFC 117
e. Money Transfer 118
f. Remote Payments – Netsize 118
v. Juniper’s View: Gemalto Key Strengths and Strategic Development Opportunities 119
5.8 Giesecke & Devrient 119
i. Corporate Profile 120
ii. Geographic Spread 120
iii. Key Clients & Strategic Partnerships 120
iv. Products and Services 121
v. Juniper’s View: Giesecke & Devrient Key Strengths and Strategic Development Opportunities 121
5.9 Nokia 121
i. Corporate 121
ii. Geographic Spread 122
iii. Key Clients & Strategic Partnerships 122
iv. High Level View of Offerings 123
v. Juniper’s View: Nokia Key Strengths and Strategic Development Opportunities 123
5.10 Company Brief: Sybase 365 123
i. Corporate 124
ii. Geographic Spread 124
iii. Key Clients & Strategic Partnerships 125
iv. High Level View of Offerings 126
v. Juniper’s View: SAP/Sybase 365 Key Strengths and Strategic Development Opportunities 126

Companies Referenced

Profiled
Accenture; Aepona; Bango; CorFire; Ericsson; Fundamo/Visa; Gemalto/Netsize; Giesecke & Devrient; Nokia; Proxama; Sybase 365

Interviewed
Accenture Mobility Services; Aepona; Alcatel-Lucent; Bango; DonRiver; Ericsson; Fundamo; Gemalto; Giesecke & Devrient; MoreMagic; Neomobile; NXP; Onebip; SIMalliance; Sybase 365; Vesta; Western Union

Mentioned
Air Kenya; Airtel; American Eagle Outfitters; American Express; Appia; Apple; Argos; Asda; AT&T; Axiata; Bankable Frontier Associates; Barclaycard; Bloomingdale's; BrightStar; Briteskies; Capital One; CCM Benchmark; Celcom; Cell C; Cellmania; Chase; Citi; Citibank Singapore; Corfire; DBS; Dominos; eBay; Equity Bank; Ericsson; EZ-Link; Faulu Kenya; First Data; Fundamo; Globe; Google; HP; HTC; Interpersonal Group; Intex; John Lewis; KDDI; Kenya Airways; LG; Macy's; Mastercard; MI; Micros; Mocapay; Monitise; mopay; MTN; MTN Uganda; Naivas; Nokia; NTT DoCoMo; Obopay; Ocado; Orange France; OTE; PayMate; PayPal; PesaPoint; RadioShack; Rakuten; RIM; Safaricom; Safarilink; Samsung; SAP; SingTel; SK Telecom; Smart; Softbank Mobile; Sony; Sprint; Starbucks; StarHub; Subway; Sybase 365; Telefonica; Telma; Telstra; T-Mobile; T-Mobile Germany; T-Mobile USA; Toys "R"Us; Tracfone; Trivnet; TSYS; Turkcell; txtnation; Uchumi; Uganda Telecom; Verifone; Verisign; Visa; Vodacom; Vodafone; Walgreens; Warid; Western Union; Zain

Case Studies
eBay; Google Wallet; Payforit; Safaricom Mpesa; Singapore IDA

Extra Info

‡ 8 key regions includes:

North America, Latin America, Western Europe, Central & Eastern Europe, Far East & China, Indian Subcontinent, Rest of Asia Pacific and Africa & Middle East.

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Please see: Mobile Payment Strategies Remote, Contactless & Money Transfer 2014-2018

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Key Questions

1. Which mobile payments sectors will see the greatest transaction values by 2017?
2. What are the key drivers behind the growth in mobile payments?
3. What are the challenges facing network operators as they try to monetise mobile payments?
4. Which regions will see the highest levels of growth from mobile payments services?
5. What impact will smartphone fragmentation have on mobile payments?
6. What are the primary billing mechanisms for mobile payments and what are their advantages and disadvantages?
7. How has consumer tablet adoption impacted upon the mobile payments space?
8. What are the primary constraints restricting service deployment and service adoption?
9. Who are the leading providers of mobile payment platforms?
10. To what extent will regulatory requirements inhibit mobile payment growth?

Any Questions about this report please contact us.

 

Related Reports:

The Mobile Payments Strategies Briefing 2012-2017, The Mobile Payments Strategies 2012-2017 Excel

Related Categories: Mobile Commerce

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