The number of people using mobile devices to purchase goods and services is expected to more than double by the end of 2012 globally, according to research firm Gartner.
Mobile payment users will reach 74.4 million in 2009, an increase of 70% over the 43 million users in 2008, the firm said. In 2012, that number should exceed 190 million users.
Once the 2012 level is reached, Gartner said more than 3% of all mobile-device users will be making mobile payments, at which point the practice will have become mainstream.
Mobile payments are growing along with growth in mobile devices because of better money transfer services and trials of newer mobile payment technologies, such as Near-Field Communication (NFC), which is already used in Japan and other countries for quick transit purchases or in-store purchases.
With NFC, a user waves a device, such as a mobile phone equipped with a special chip, near a wireless reader that registers a deduction from some kind of financial account held by the user. Often the account is a typical credit card account.
Gartner defines a mobile payment as paying for a product or service using mobile technology including NFC, Short Message Service (SMS), Wireless Application Protocol (WAP) or Unstructured Supplementary Service Data (USSD).
By Gartner's definition, mobile payments include transactions backed by debit and credit cards, travel cards, gift cards, Paypal's online payment service and cash. Gartner doesn't include in its projections those transactions that rely on a mobile carrier's billing system, which essentially turns the carrier into a type of bank.
Mobile payments, when used in developed countries are usually an extension of an existing payment infrastructure. But in developing countries, users can combine mobile payments with mobile banking to pay bills more conveniently and to gain access to loans and other financial services that might not have been possible before, according to Sandy Shen, a Gartner analyst. "It can greatly improve standards of living," she said.
The biggest share of mobile payment users will be in the Asia/Pacific region and Japan through 2012, followed by Eastern Europe, the Middle East and Africa and Latin America. Behind those regions will be the U.S. and Western Europe.
"The most profound impact of mobile banking and payment services is that they provide the non-banking population with access to modern financial services, giving them tools to improve their living standards," Shen said. There are also benefits to mobile operators and financial institutions, she added.