PayPal, Forrester, Deloitte & First Data research on mobile payments

USA gets mobile NFC

Just got a note from Deloitte about research they’ve performed into mobile financial business models.

The survey covered 89 senior executives from a wide range of companies with close ties to mobile payments.

These respondents predicted that more than 24% of all mobile subscribers in the USA are likely to be using mobile banking in 2012, and more than 5% are likely to execute transactions on their phones for mass transit, fast food, or digital goods.

According to survey respondents, the two most likely business models are partnerships between mobile carriers and financial institutions (43% of the vote); and an open federation model that brings together mobile carriers, financial institutions, merchants and others, to deliver multiple payment services on a common platform across different devices (26%).

While financial institutions have traditionally been reluctant to share merchant revenues with carriers, that position may be softening with half of the financial institutions surveyed supporting the idea of sharing merchant revenues with mobile carriers.

Interestingly, 27% of respondents believe that Near-Field Communications (NFC) is the killer app for mobile payments – more than any other technology (see my blog the other day).

What about the UK?

In related news, PayPal sent me some research they commissioned from Forrester into the UK market for mobile payments. The report anticipates an explosion in mobile retail, predicting that the market will grow an average of 42% each year and be worth £2.5 billion by 2016 in the UK alone.

By way of comparison, Brits spent about £56 billion online in 2010, compared to just £1.8 billion in 2001, so you can see where this is heading.

The key insights of the PayPal / Forrester report includes:

UK mobile retail sales currently represent 1.5% of overall UK online retail sales, or £438 million (according to the stats above, this is more like 0.8%).

By 2016, UK mobile retail sales will hit £2.5 billion as just over 14 million adults regularly shop via their mobiles (that will be about 3% of total online retail sales or, if using Forrester’s numbers, about 6%).

Each mobile shopper currently spends an average £100 per year in 2011 - by 2016 this will jump to £180 per year.

The market will grow at a compound average of 42.5% per year, fuelled by increasing numbers of mobile shoppers, a rise in smart phone use and increasing numbers of retailers developing easy to use mobile shopping experiences.

The report implies that some retailer segments will race ahead of others with ticketing, fashion, media, electronics and coupons being the main categories for success.

Interestingly, they are promoting this as the PayPal mobile app is a key for them now, so here’s a few PayPal mobile payment facts:

• PayPal was created to send money between PalmPilot mobile organisers. It launched  PayPal Mobile in 2006.
• Over 1 million PayPal UK customers have sent a payment on their mobile devices
• PayPal UK customers already make an average of almost five mobile transactions a month
• Globally, eight million PayPal customers regularly make purchases on their mobile phones
• PayPal expect to handle over $3.5 billion in mobile payments globally in 2011

If you’re really interested, you can download their full report: PayPal UK Mobile Retail Forecast.

Chris Skinner and friends on Mobile

Finally, First Data recently ran a corporate event where mobile banking and payments were the focus.  They released research, as well as two videos one of which stars yours truly.  You can check it all out on their webpage, and download the research report too if interested: First Data Report on Mobile Finance.