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Businesses changing mobile strategies as mobile payments soar

25th Jun 2010
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At the same time as the number of consumers using mobile technology for payment purposes is set to double, European retailers are switching their mobile focus away from enhancing internal efficiency towards boosting customer service and support.

According to a study undertaken by researcher Gartner, the number of people undertaking mobile payments will increase by 54.5% to 108.6 million this year, representing 2.1% of all mobile users.

While growth will be strongest in developing markets in Asia, Eastern Europe, the Middle East and Africa (EMEA), adoption in Western Europe will be slower as consumers in the region have more payment options.

If Europe, the Middle East and Africa are taken together, the total number of mobile payment users will hit 27.1 million, the equivalent of 2.1% of all mobile customers in the region. In North America, the figures are estimated to be 3.5 million and 1.1% respectively, while in Asia-Pacific, the numbers are predicted to be more like 62.8 million and 2.6% respectively.

Sandy Shen, a research director at Gartner, said that, although developing markets had already found the right formula for mobile money services, the situation was more "elusive" in developed ones, where financial institutions would benefit from working with large retailers and online merchants to understand existing purchasing and payment patterns.

"The offerings for developed markets will take a different format. Instead of a point offering for mobile payment, the service needs to be built on top of existing payment behaviour and infrastructure so that users can choose any channel – retail, phone, online or mobile – that suits their context at the moment of payment," she added.

SMS remains the dominant form of mobile payment technology across all regions due to its ubiquity and ease-of-use, although WAP/web-based applications were also popular in the developed world simply because more data-capable ‘phones and active data plans were available.

Researcher IDC’s Retail Insights unit, meanwhile, indicated that European retailers were increasingly moving the focus of their mobile and networking strategies away from boosting internal collaboration and supply chain efficiency towards improving specific business processes. Such processes included customer service and support as well as inventory and warehouse management.

Ivano Ortis, a research director at the organisation’s EMEA business, said that: "Mobile consumer interaction will allow retailers to blend payment, loyalty, customer service and promotional offers to the next level."

According to his survey among 253 retailers employing more than 20 staff, expenditure on networking equipment and retail-specific mobile store devices would continue to grow this year and would keep on doing so over the next few years, with investment being highest in general merchandise and food.


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