Fixed Mobile Convergence

Frost & Sullivan (News - Alert) estimated that Asia-Pacific mobile payments (m-payments) would exceed billings of US$3.6 billion at a compound annual growth rate (CAGR) of 14.8 percent between 2010 and 2015.

Shaker Amin, analyst at Frost & Sullivan, attributes the growth to technology innovations and operator initiatives, especially the Near Field Communications or “NFC” along with the rising demand of consumers in both developed and emerging markets.

According to the study from Frost & Sullivan, contactless payments through the NFC channel would increase in popularity and that would account for 23 percent of the m-payments in 2015.

The SMS method would remain the main payment channel until 2015 and would account for about 67 percent. Small fractions to m-payments would be contributed by Wireless Application Protocol (WAP) and Direct Mobile Billing (DMB).

According to Amin, Japan and South Korea would lead in the adoption of mobile payments. Amin also suggested that China, India, Indonesia and Philippines with less-developed mobile markets would use mobile banking services and also person-to-person or “P2P” transfers and remittances.

In the emerging markets of Sri Lanka, Bangladesh and Pakistan, m-payments services would gain popularity because of the large population of workers living in these countries.

Despite the highest mobile penetrations, m-payments are less popular in Hong Kong, Singapore and Taiwan. Smart cards are found to be more popular in these countries. 

The mobile payment value chain, according to Amines, is faced with issues of which vested party plays the bigger role - and hence, takes a bigger revenue share - and infrastructure interoperability issues between the banks', application service providers' and mobile operators' platforms..

Many dominant payment service providers had started to provide payment services by means of mobile phones. The banks show deep interest to get into NFC bandwagon.

According to Amin, eventually, a strong government support would influence the driving uptake and making NFC and forming a cashless society.

In Feb. 2009, Singapore became the first country for the creation of a central Trusted Third Party (TTP) designed to deliver NFC ecosystem that is fully interoperable and multi-application system.

In April 2009, IDA (News - Alert) announced a funding to help grow the installed base of contactless terminals in food courts, coffee shops, fast food outlets, convenience stores, vending machines, and so on.

In the early stages of NFC adoption, IDA expects the annual revenue from NFC mobile payments and advertising to amount to US$43 million for Singapore, according to Frost & Sullivan.

In Aug., MarketResearch.com said that the NFC mobile payment in the U.S. remains still fragile, with an adoption rate of only 1.7 percent, according to TMCnet report.