South Korea is set to see an explosion in the popularity of mobile contactless payments, with a compound annual growth rate (CAGR) of over 50% for the next few years, according to Celent.
Long seen as a pioneer in the contactless payments market, south Korea is now seeing its work finally beginning to translate into growth, says the research house.
Since 2009 the market has surged to life with mobile carriers and Korea Smart Card collaborating to aggressively roll out the Mobile T-money service. In addition a joint venture between Hana Card and SK Telecom, was launched, energising the mobile credit card market.
Celent projects that the number of pre-paid contactless payment customers will reach 4.5 million by 2012, resulting in a CAGR of 56.3%. Transactions using this method will rise by 2012 to 180 million, for a CAGR of 29.7%, and Celent expects that total value will reach $140 million, for a CAGR of 39.9%.
However, growth hinges on a number of factors, including increased penetration of mobile phones with RF antennas, the spread of suitable payment processing terminals, and new services that differentiate the method from conventional cards.
KyongSun Kong, analyst, Celent Asian Financial Services Group, says: With this innovation afoot, the prospects for growth are bright, but there are obstacles that must be overcome and potential pitfalls that must be avoided. While the country has yet to clear these hurdles to growth, 2010 has seen a number of new services announced, and it is clear that the mobile contactless payments market is continuing to evolve."