By Jean Diop, Rob Deitz and Bas van der Zijden
Abstract
M-payments refer to the use of mobile devices such as mobile phones and PDAs to make cashless financial transactions on the move. M-payments can offer a wealth of revenue generating possibilities for mobile telecom operators facing limited growth in ARPUs. Telcos in the Far East have already stolen a march on Europe and the US in this space. The market is likely to be shaped and powered by supply side technology standardization, financial services drivers, and growing consumer acceptance. We believe that there are three key strategic options for mobile operators: m-payments as a core business, provision of m-payments as an add-on service, and no direct, or limited m-payments business. We estimate the European market will be worth €913million in 2008, rising to over €8.7 billion in 2012, approximately 5-10% of total projected mobile data revenues.
We recommend that mobile operators in Europe take an incremental but active approach now, according to their core competencies, appetite for risk, and strategic intent. Whichever route is chosen, mobile operators need to take strategic decisions with regard to their investment in this market, sooner rather than later, particularly with financial services companies waiting in the wings.
