The value of remote mobile payment by smart phones is set to reach $389 million in 2009, rising rapidly to $8.6 billion by 2014, according to forecasts from Mercator Advisory Group,
With 40 million mobile web users expected to rise 50% in 2009 and almost 75% of mobile subscribers accessing data services (principally SMS) this channel is getting wider and richer faster than anticipated, says Mercator.
The analyst group says the lock mobile network operators have held on m-payments is weakening quickly as Web applications replay a mobile version of the Internet's "smart devices, dumb pipes" model.
Despite the economic downturn, Web-savvy merchants are seizing the opportunity to put their storefront in the consumer's pockets, says George Peabody, director of Mercator Advisory Group's emerging technologies advisory service - and they're not willing to wait for Near Field Communications to arrive to kickstart sales.
"The remote payment proposition has been largely off the radar of many in the payments industry," says Peabody. "But merchants with an eye on customer experience management and relationship building see mobile as a direct avenue to their consumers."
PayPal in particular appears to be positioning itself to take the lead in this new category, says Peabody.
"Innovation and opportunity will highlight the next few years as consumers download mobile malls onto their handsets and transaction volumes grow," he adds.