Global spending in mobile payment solutions is expected to grow steadily between 2011 and 2016. We expect:

•  Most commercial banks, globally, are undertaking initiatives to add or improve their mobile payments capabilities.
•  Increased smartphone adoption will allow for greater opportunities to use mobile payments.
• Increased smartphone adoption will also increase functionality for consumers, particularly in partially developed regions.
• Widespread adoption of technologies that seamlessly integrate with a financial institution’s existing mobile and online banking applications.
• Payment functions that expand the users’ functionality from mobile banking applications will provide the highest return on investment to financial institutions and improve customer loyalty.
• Smaller FSIs will offer mobile payment functionality through less costly outsourced solutions, resulting in a slight shift from spending on vendor software to IT Outsourcing.

Spending in Mobile Payments Solutions is expected to grow at the fastest annual compound rate, 42%, in Latin America and the Caribbean from an estimated US$21 million in 2011 to US$121 million by 2016.

FSIs in Asia Pacific will spend the largest amount (US$1.3 billlion in 2011 and an estimated US$3.1 billion in 2016) in this technology during the next 5 years.

Under pressure to find new revenue streams, banks face a tough decision over whether to charge for mobile payments service. Banks considering charging fees for this service must weigh the tradeoffs between long-term customer mobile retention and short-term fee income.

Mobile Payment Solutions estimates are part of a new initiative: TechSpend. The new research provides Financial Service Institutions’ spending forecasts in all major IT areas. TechSpend will forecast global spending broken down by region (North America, Europe, APAC, Latin America and the Caribbean and Middle East and Africa) and source of spending (internal, hardware, software, professional services and IT outsourcing) while also offering insights into the underlying growth drivers.   Based on our expertise and bottom up approach to technology spend estimation, we identify and project the key drivers of units in operation and price for a technology.  

To learn more, CEB TowerGroup Retail Banking members can access the full TechSpend:  Mobile Payment Solutions.

 CEB TowerGroup Commercial Banking members can also access the full TechSpend: Mobile Payment Solutions.