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PROSPECTS FOR THE FUTURE OF MOBILE PAYMENTS
If fast, efficient and convenient electronic payments were a Zen-like pursuit, then the ability to pay for items at the click of a button on ones mobile phone must qualify as nirvana - taking the concept of shopping anytime, anywhere to the limit.
There is no doubt that mobile content is hugely popular. Both ARC and the Yankee Group agree that global ring tone sales topped 3.5 billion US dollars in 2003 and that this figure is rising. It is also clear from the success of ring tones and games that consumers are prepared to use their handsets as a purchasing tool. The huge demand from users keen to complete purchases directly from the phone, should encourage those looking to offer mobile payments as a purchasing option to innovate new content and services.
On the move payment functionality is particularly key for online content and service providers who are seeking ways to exploit the lucrative revenue opportunities offered by the new generation of mobile handsets. However, providers will not simply be limited to mobile-based content. Advances in remote payment authorisation technology are enabling consumers to pay for a great deal more with a mobile device, be it paying to park or charging a travel card.
Additionally, the introduction of alternative 'offline' payment solutions which allow the user to set up an online account and attribute charges to it from their mobile phone, give a strong indication of the convergence potential of online and mobile platforms and the very tangible revenue opportunity.
As mobile phones become increasingly sophisticated devices, used to engage with newly emerging content types like video and MP3 audio, they will also be used to purchase more compelling and higher value mobile content as well as. ARC believes revenues from mobile services will reach 126 billion US dollars by 2008 and that mobile entertainment services will make up more than 20 per cent of this figure.
Whether on the move payment becomes the preferred option depends on whether it actually adds value. The global market for payments will expand, as the payment experience is simplified, however the content must be compelling and the service must add value, if not then so called 'offline' payments may simply remain a niche player.
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