Global mobile statistics 2014 Section F: M-commerce, m-payment, NFC, m-ticketing, m-coupons, m-gambling and m-entertainment

July 2014: The essential compendium of need-to-know statistics. Put your mobile strategy on a sound footing with the latest research and stats on the mobile commerce and payments market, near-field communications (NFC), mobile retail, mobile ticketing for travel and entertainment, mobile coupons and vouchers, mobile gambling.



FINDING YOUR WAY AROUND THE MOBILE STATS COMPENDIUM:

Home: Full index of contents and highlights • Section A: Mobile subscribers; handset share • Section B: Mobile Web; 3G • Section C: Mobile marketing, advertising and messaging • Section D: Consumer mobile behavior • Section E: Mobile apps, app stores • Section F: Mobile payment, NFC, m-commerce, m-ticketing and m-coupons • Section G: Mobile financial services (MFS) and m-banking • Section H: VC investment in mobile.


Section F: Mobile commerce and m-payments, m-wallets, NFC/contactless payments, m-ticketing, m-coupons

1) Mobile commerce (m-commerce) (NEW)
2) Mobile payments (m-payments) (NEW)
3) Near-field communications (NFC) or contactless payments (NEW)
3a) NFC NFC devices; (NEW) 3b) NFC terminals (NEW)
4) Mobile wallets (m-wallets) and m-payment providers (NEW)
4a) World’s biggest m-wallets (non NFC); 4b) NFC-enabled m-wallets (NEW)
5) Retail mobile commerce (m-commerce) and mobile retail (m-retail) (NEW)
6) Mobile bill payment (NEW)
7) Mobile tickets (m-ticketing) (NEW)
8) Mobile coupons (m-coupons) (NEW)
9) Mobile gambling (m-gambling) (NEW)
10) Mobile entertainment (m-entertainment) (NEW)


Mobile commerce (m-commerce) or mobile payments (m-payments?)

• mT note of caution: definitions of m-commerce, m-payments and related terms, vary considerably, this means that the estimates and forecasts from different analyst groups can vary considerably. There is a big overlap between m-payments and m-commerce; and depending on whether you believe m-payments to be a subset of m-commerce or m-commerce to be a subset of m-payments, these terms could actually refer to the same thing.
• A narrow interpretation of m-commerce will restrict it to the buying and selling of goods and services using a mobile device or over a mobile connection, and thus wouldn’t include m-money transfers, unless something is actually being purchased. As m-commerce necessitates taking/making a payment by mobile, it makes it a subset of m-payments.
• A broad interpretation of m-commerce says that banking is commerce – after all, moving money into an investment account (which appears to be driving growth of the Chinese giant Allipay – see m-wallets below) is essentially buying a financial product. This makes m-payments a subset of m-commerce and makes m-commerce forecasts considerably larger.
• Be aware that e-commerce stats often include m-commerce. Clearly it is digital/electronic whether it is conducted via desktop or mobile, but sometimes e-commerce is used to mean purchasing using a desktop or PC commerce, as opposed to m-commerce, which applies to mobile.
• Similarly, there is a question mark over what is “mobile” – is it the device or the connection? Is a tablet a mobile device if it is only used over a WiFi connection at home? Some analysts now distinguish between tablet and mobile (handset) commerce.
• This all makes comparisons between different stats from rival analysts difficult, dangerous even.
• What does it means for businesses? Whatever the definition, m-payments and m-commerce are growing strongly. Consumer uptake is rapid. All businesses that do commerce, in the physical world or electronically, need to make sure that they are able to sell goods and services via mobile; using all the major mobile channels and m-payment methods.


1) Mobile commerce (m-commerce)

Juniper (June 2013): estimates total global m-commerce via tablets and mobile phones to be US $1.5 trillion in 2013. M-commerce is expected to exceed $3.2 trillion by 2017.
• In the m-commerce stats Juniper includes a) remote mobile payments for digital and physical goods b) m-ticketing; c) m-coupons; d) NFC m-payments; e) m-money transfer; f) m-banking; g) m-gambling. Juniper says mobile banking (particularly fuelled by bill payment) will account for the lion’s share of transaction values over the next five years.

• See below for stats on m-paymentsNFCm-ticketingm-couponsMobile gambling (m-gambling)
• See Section G for stats on m-bankingm-money


“A significant minority of retailers have yet to optimise their sites for mobile. Unless retailers ensure a seamless, user-friendly mobile shopping experience, they will fall behind competitors who are already using mobile channels to enhance customer relationships.” – Dr Windsor Holden Juniper Research (June 2013)


2) Mobile payments (m-payments)

Worldwide mobile payments (m-payments) are growing strongly, but will still only be worth a fraction of online or e-payments: N.B. definitions of m-payments and m-commerce varies between analyst groups.
• Merchandise purchases (e.g. via Amazon and eBay) account for most of m-payments in developed markets.
• Money transfers and prepaid top-ups account for most of m-payments in developing markets.
Gartner (June 2013): estimates that there are 245 million people making mobile payments (money transfer, purchases, bill payment) in 2013. This is expected to grow to 450 million people in 2017.
Juniper (April 2014): global payments via mobile devices expected to be US $507 billion in 2014, up 40 percent from 2013.
Gartner (June 2013): estimates mobile payment transaction values at $235 billion in 2013 and will reach $721 billion in 2017. Money transfers account for about 71 percent of total transfers in 2013 and 69 percent in 2017.
Gartner (June 2013): forecasts that Asia pacific will overtake Africa as the largest region for mobile payments by 2016 worth $165 billion against Africa’s $160 billion.
Juniper (April 2014): growth of mobile payments will be driven by purchases of physical goods via mobile devices. Average transaction sizes over tablets are already exceeding those via desktop PCs in many markets. Spend via smartphones is increasing sharply, but primarily used as search and discovery devices with the final purchase being made on the tablet.


“The number of mobile banking customers was 116.52 million, an increase of 38.88 percent over the previous year; the number of transactions was 1,192 million, an increase of 212.99 percent over the previous year. The number of SMS customers amounted to 199.45 million, an increase of 25.91 percent.” – China Construction Bank (CCB) 2013 Annual Report.

• See Section G: for all the stats on mobile financial services, including m-banking and money transfers


3) Near-field communications (NFC) aka tap-to-pay or contactless payments

After a decade of hype, m-payments using NFC is, at last, showing signs of taking off.
• NFC technology allows a payment by touching or tapping a mobile device to a contactless terminal. It is the same technology that used for smart-card-based transport ticketing in some cities and tap & go credit/debit card payments, which is being slowly introduced in many developed countries.
Juniper (June 2014): 300 million people will make contactless payments by 2017, up from 110 million in 2013.
Juniper (March 2014): There will be 3 billion contactless transactions via mobile handsets in 2014; rising to 9.9 billion by 2018.
Strategy Analytics (October 2013): by 2017, there will be 115 Million NFC handset owners spending just over $48 billion using their NFC phones. (This is lower than forecast previously). Although $48 billion is a large amount it represents a drop in the ocean of the multi-trillion dollar global retail sector. Network operators are blamed for a slowness in bringing NFC services to market.
Juniper (March 2014): the introduction of Host Card Emulation (HCE) could help drive NFC payments. HCE transforms an app into a virtual smartcard, meaning that the secure element (SE) no longer has to be physically present in the handset, so banks etc can launch wallets without needing to partner with the mobile operator.
Juniper (March 2014): expects Apple to lauch iWallet in Q4 2014.
GSMA (July 2014): catalogues 150 SIM based NFC launches around the world that are live currently, or will be by the end of 2014.

3b) NFC devices

• Critical to the take off of NFC is availability of NFC-enabled handsets. These are now available from most device manufacturers except Apple, though there have always been speculation that the “next” Apple handset might. Apple’s reasoning for its reluctance to play ball is unclear. Bored of waiting, operators such as Verizon are now selling NFC-enabled cases for iPhones.
NFC World’s list (July 2014) now has 260 NFC-enabled handsets available now or coming soon, compared with 174 a year ago.
GSMA (January 2014) estimates that there are 273 NFC handset models.
Berg Insight (June 2013): 140 million NFC handsets were sold in 2012, 300 percent more than 2011. Berg estimates that there are 170 million units in use worldwide (about 3.3 percent). This is going to rise rapidly until in 2017 when there will be 2.1 billion NFC handsets in use (about 32 percent of total handsets).
ABI Research (March 2013): estimates there will be 500 million NFC-enabled devices in use by March 2014. ABI praises device manufacturers for driving market forward; blames mobile network operators (MNO)s for holding it back.
ABI Research (May 2013): MNOs are expected to ship 100 million NFC-enabled SIM cards in 2013 (these are called SWP - Single Wire Protocol - SIM cards).

3c) NFC terminals

• Critical to the take off of NFC is the number of places – retailers, public transport, events – where you can pay with your NFC-enabled device.
Berg Insight (June 2013): 3.9 million NFC-ready point-of-sale (POS) terminals shipped in 2012, which was double the 2011 total. NFC is now a standard in new cash/check-out registers, from POS vendors such as VeriFone and Ingenico (but penetration depends on retailers replacement cycle). By 2017, 44.6 million NFC-ready POS terminals will ship annually. 39 percent of cash tills worldwide will be NFC ready, in 2017, led by Europe with 87 percent of tills and US with 82 percent.

• mobiThinking reality check on NFC:

NFC is still only a small percentage of mobile payment. As Gartner (June 2013) points out only 2 percent of total mobile transaction value in 2013 and 5 percent of the total transaction value in 2017 will be via NFC.
The other 98 percent of global mobile payments are made via SMS, USSD (Unstructured Supplementary Service Data), mobile Web and mobile apps. These vehicles of mobile payment are here today: SMS- and USSD-based payment services work with all handsets; mobile Web works on any handset with a browser (most new handsets ship with a browser today); and native apps work with specific smartphones.


4) Mobile wallets (m-wallets) and other third-party payment providers

• An m-wallet enables mobile users to pay with their phone at participating outlets (real or virtual) and the funds are either deducted from a balance, topped up by the customer using a bank card or bank transfer; or funds are taken directly from a credit/debit card that has been added to the wallet. Wallets enable payments to be made for goods/services (i) on mobile Websites or apps, in a similar way to online payment methods such as Paypal and (ii) in-store purchases or transport/event ticketing – where enabled by the vendor. In the second instance, some wallets allow payment by touching the mobile device to a reader, aka contactless payments or NFC, while others require a barcode or QR code to be scanned using a barcode reader in-store. Many m-wallets, particularly NFC-enabled wallets, are joint ventures between mobile operators and/or banks and/or handset manufacturers.
Juniper (May 2014): 1 in 5 mobile handsets will have mobile wallet functionality by 2018, compared with less than 1 in 10 in 2013.
Juniper (May 2014): 1 in 3 mobile wallets – and over 50 percent of wallets in developed markets – will feature contactless payment by 2018.
Berg Insight (June 2013): In-store mobile wallet payments will reach €78 billion ($60.9) in Europe and North America by 2017, compared with less than €0.1 billion ($0.13) in 2012.
Yankee Group (February 2014): two-thirds of US consumers are interested in learning more about mobile wallets, but interest is simply not translating into adoption. Only 16 percent of US mobile owners have used their phone to make an in-store payment in the past three months. PayPal mobile (used by 15 percent of consumers in past month) enjoys four times the adoption of its closest third-party wallet competitor, Google.

4a) The world’s biggest (third-party) m-payment providers and m-wallets (non-NFC)

Alibaba via Reuters (February 2013): In 2013, Alipay, the payment arm of the huge Chinese e-retailer Alibaba Group, had 100 million users, who completed over 2.78 billion mobile transactions with a total value topping 900 billion yuan ($148.43 billion). Alipay claimed this was more mobile payment transactions than U.S.-based PayPal and Square combined. [mT note: Stats for Square are unavailable – the app was pulled from app stores in May 2014 and replaced with another, which doesn’t suggest much success.]
iResearch (March 2014): In 2013, Alipay’s general merchandise volume (GMV) reached to 906 billion Yuan ($145 billion) 19 times more than 2012. Giving it 74.3 percent of the 1,200 billion Yuan ($193 billion) Chinese market. Monthly unique visitors of Alipay Wallet app were 134 million in Dec.2013, up 107 percent compared with the same period in 2012.
Paypal (2013 annual report): processed $27 billion in mobile payment volume in 2013, up 99 percent over 2012. Number of mobile users is unclear.
• See: Japan’s Osaifu-Keitai, below, 36 million installs, but transaction value is unavailable.
iResearch (March 2014): In 2013, Tenpay GMV of Tenpay, including WeChat payment, arrived at 52 billion Yuan ($8.4 billion). Monthly unique visitors to Tenpay were 15 million.
IDC (April 2014 ): 37.2 percent of US respondents to the IDC Financial Insights' 2014 Consumer Payments Survey made mobile payments. Of those who reported using mobile payments, PayPal Mobile was used by 58.6 percent, ahead of Amazon Payments and Apple's iTunes, which were both used by 40 percent.
Starbucks (April 2014, Q2 earnings call): the coffee chain’s mobile loyalty app has 10 million active users making over five million mobile transactions per week, which accounts for 14 percent of in-store tender in the US and Canada, up 75 percent in a year. [mT note: Starbucks revenue in the Americas was $2.8 billion – assuming no more than 25 percent of that is non-store and Latin American income, mobile revenue could be $300 million for the quarter or $1.2 billion for the calendar year. Interestingly, Starbucks has received enquiries about licensing the chain’s mobile technology, which the company is clearly considering.]

4b) NFC-enabled m-wallets

NFC is closely tied to the fortunes of the NFC-enabled m-wallets. According to Berg Insight (June 2013) there were NFC m-wallet services commercially live in 13 countries worldwide at the end of Q1, 2013. The main players are:
• NTT DoCoMo's Osaifu-Keitai, in Japan, is the world’s largest contactless payments wallet, installed on 36 million phones (NTT DoCoMo). This is based on the FeliCa smartcard network (the first FeliCa-enabled handset debuted in 2004) which is different to the international NFC standard, but NTT DoCoMo is committed to integrate FeliCa with NFC in modern handsets, and has struck a deal with MasterCard to allow customers to make contactless payments abroad.
• SK Telekom's smart wallet Syrup, in South Korea, has 12 million subscribers and 45 million cards (including loyalty/payment cards of 400 retailers/brands) issued. Mobile transactions are close to KRW 1 trillion ($970 million) (SK, June 2014).
• KT's Moca Wallet, in South Korea, has two million mobile subscribers (See GSMA case study, October 2013) offers coupons, loyalty programs, payments, transit ticketing and P2P payments.
China Mobile/UnionPay, in China, is a collaboration between the country’s largest operator and the main card network operator. China Mobile reports the take-up of 2.5 million NFC handsets, 600,000 NFC-ready SIMs and 1.4 million NFC-enabled point-of-sale terminals (GSMA, October 2013). But China Mobile says these numbers are small for China, citing the lack of affordable NFC-ready handsets and the inconvenience for consumers who need switch to an NFC-ready SIM to be able to use the services.
• China Unicom and China Merchants Bank’s Unicom Merchants’ Bank – unfortunately the number of subscribers is unavailable.
Singapore’s IDA consortium project – unfortunately the number of subscribers unavailable.
Turkcell Wallet, in Turkey, is installed on 1.2 million handsets (Turkcell, April 2013). However active users is unavailable.
ISIS, US, is a joint venture by AT&T, T-Mobile and Verizon Wireless – unfortunately the number of subscribers unavailable. Planning a rename due to conflict with radical group The Islamic State in Iraq and the Levant (ISIS).
Google Wallet (US) – unfortunately the number of subscribers unavailable. After the departure of its leader, Osama Bedier, Bloomberg (June 2013) reported that Google Wallet has become a “money pit”.
• See GSMA case studies (October 2013) for more details on SK Syrup, Turkcell, KT MoCa, ISIS, Gemalto.


5) Retail mobile commerce (m-commerce) and mobile retail (m-retail)

• Retail m-commerce is purchasing goods and services, i.e. merchandise, from retailers, using a mobile device either via a mobile Website or native apps. But arguably there is a lot more to m-retail than this. Mobile devices are often used as a shopping aid, searching for items, browsing stores, researching and comparing prices, but the item might be purchased in store or via a different device – which means that mobile’s contribution to a sale is often overlooked by retailers. Savvy retailers use SMS, email, mobile ads and social media as part of their m-retail strategy for customer engagement, promoting products, competitions and loyalty programs which drives traffic to the retailer’s Website – clearly, the site must be mobile-friendly and m-commerce enabled, or people will not/cannot purchase.


“Worldwide, people are not purchasing as much because the buying experience on mobile devices has yet to be optimized. People are spending less via mobile devices than via online e-commerce services and at retail outlets.” – Sandy Shen, research director, Gartner (June 2013).



Juniper (January 2014): retail spend via mobile phones and tablets was worth $182 billion in 2013 – which was about 15 percent of e-retail. Mobile retail spend is forecast to be $707 billion by 2018, representing 30 percent of all e-retail.
Gartner (June 2013): merchandise purchases will account for 21 percent of total mobile transaction value in 2013 and 23 percent in 2017. [mT: This equates to $49.4 billion worldwide in 2013 and $165.8 billion in 2017].
Juniper (March 2014): predicts a significant migration of purchasing and transaction activity from laptops and desktops to mobile devices, particularly tablets, which are increasingly used for ‘couch commerce’. Where users have both devices, they will often use the handset for browsing and complete the purchase on the tablet, thus by the end of 2013 global per month retail spend on tablets had eclipsed that on handsets.
Juniper (January 2014): Retailers need to combat ‘showrooming’, where consumers examine retailer products in-store while simultaneously browsing on their mobiles to compare prices online, by deploying tablets equipped with mPOS (mobile Point of Sale) capability throughout the store, while also introducing a price match option. The report cautioned that while retailers were increasingly optimising their sites for mobile handsets, only a small minority had done so for tablets.


6) Mobile bill payment

Gartner (June 2013): bill payments will account for about 5 percent of the total mobile transactions in 2017. [mT: This equates to $36.1 billion worldwide in 2017]. Bill payment is taking off particularly fast in the developed world, contributing to 44 percent growth globally in 2013.
Juniper (March 2014): one quarter of tablet users will use their device to pay bills by 2017. Juniper believes consumers prefer managing bill payment and transactions via tablet devices compared to smartphones.


7) Mobile tickets (m-ticketing) for travel and entertainment

• m-ticketing is using a mobile device to pay to travel or enter an event on an ad hoc basis, or to prove payment has previously been made, by showing a digital ticket or receipt. With m-ticketing the consumer doesn’t need a paper ticket or a smartcard-based ticket. M-ticketing tends to use a) contactless, tap-and-go, technology, commonly used for ticketing in Japan; b) barcodes, or QR codes, for example used in a mobile boarding pass from American Airlines; or c) SMS, for example, for public transport in Stockholm and Prague. Mobile boarding passes, of various kinds, are available from many airlines.
ABI Research (February 2014): 34 billion tickets will be delivered to mobile devices over the next five years (2014-2019). QR codes are forecast to make up 48 percent of all m-tickets delivered, NFC with 30 percent and SMS and others making up the remaining 22 percent.
Juniper (June 2013): 458 million people will use m-tickets in 2013; growing to 950 million by 2018. • Customers often quickly adopt mobile ticketing where it is introduced: At Boston’s Massachusetts Bay Transportation Authority (MBTA), which introduced mobile ticketing in late-2012, mobile accounted for 10 percent of ticket sales within seven weeks of launch.
Juniper (July 2013): More than 16 billion transport and events tickets will be delivered annually to mobile handsets by 2018. • SMS-based solutions have achieved particularly strong adoption across markets such as Sweden, where mobile now accounts for 65 percent of bus ticketing sales.


8) Mobile coupons/vouchers (m-coupons)

An m-coupon is a discount coupon voucher that is received on a mobile device (perhaps by SMS, email, QR code or mobile ad) and then redeemed using the mobile device either in-store or via a mobile Web site. M-vouchers use SMS, barcodes or QR codes, or NFC (still not common outside Japan).
eMarketer (May 2014): More than 70 percent of US adult digital coupon users will redeem a coupon or code on a mobile device for online or offline shopping in 2014; the number of coupon users redeeming an m-coupon will rise to 82.9 percent in 2016.
Juniper (January 2013): expects 10 billion coupons to be redeemed by mobile in 2013, 50 percent more than 2012. Juniper says m-coupons drive retail footfall and to enhance consumer engagement and retention. M-coupons deliver a higher average redemption rate of at 10 percent, compared with a 1 percent redemption rate for print or PC coupons.
• The NFC-based m-coupon service of McDonald’s Japan is used by 4.5 million users, according to Infinita (March 2010).
• The United Nations’ World Food Programme (WFP) (October 2010) uses m-vouchers to deliver food aid to 40,000 Iraqi refugees in Syria by the end of 2010.


9) Mobile gambling (m-gambling)

Juniper (February 2014): mobile users placed bets worth $10 billion in 2013 on casino-type gambling and poker games. This is expected to grow sixfold to reach $62 billion globally by 2018. Legalization of selected online gambling services in the US market is expected to contribute to global growth. • The gaming business’ move into mobile is partly influenced by the success of pretend gambling games including Big Fish Casino, Poker by Zynga and Slotomania, which are among the highest grossing games on Apple’s App Store through consumer purchases of virtual currency. • Lottery operators have shown little intention to move into mobile, perhaps lack of competition removes any incentive to innovate.
Juniper (December 2013): 164 million people will either place a bet, visit a mobile casino or buy a lottery ticket on their device in 2018, 100 million more than 2013. The majority of these users would be switching from PC to mobile gambling, due to the better mobile experience e.g. in-play betting on a mobile device does not disrupt a user’s experience when watching a live sports match, and dual-screen options on tablet casino games can enhance gameplay.


9) Mobile entertainment (m-entertainment)

Juniper (December 2013): annual revenues from mobile entertainment services were $39 billion in 2013. It is expected to reach almost $75 billion by 2017. The biggest market is Far East and China. Relatively low growth is anticipated in the adult sector, where revenues continue to be diluted by free and pirated content. App discovery remains a key challenge for all those in the mobile entertainment ecosystem to overcome.


FINDING YOUR WAY AROUND THE MOBILE STATS COMPENDIUM:

Home: Full index of contents and highlights • Section A: Mobile subscribers; handset share • Section B: Mobile Web; 3G • Section C: Mobile marketing, advertising and messaging • Section D: Consumer mobile behavior • Section E: Mobile apps, app stores • Section F: Mobile payment, NFC, m-commerce, m-ticketing and m-coupons • Section G: Mobile financial services (MFS) and m-banking • Section H: VC investment in mobile.

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