M-commerce market set to multiply

The time has come for mobile commerce, according to a new research report.

Though slow to take off, several factors are aligning to boost the market for mobile payments and financial transactions, says mobile industry analyst house the ARC Group. One is a booming mobile content space, which the analyst house predicts will be worth $50.7bn by 2009.

Entertainment, mainly that consumed by young people, is the type of content seen driving much of this growth, according to the report's lead author Paul Merry.

Young users are good for the future of mobile commerce - or m-commerce - because it means the adult users of tomorrow will be used to the process of making mobile payments, Merry argues.

The rise in the number of prepaid mobile customers is also a factor in the m-commerce boom, says Merry - as these individuals are comfortable with making payments from a mobile phone and would likely also be willing to pay for other goods and services from their phones.

The ARC Group expects revenues from prepaid mobile services to reach $266bn by 2009.

In addition, retailers, which are particularly interested in mobile transactions as it could help them take advantage of impulse buying and allow them to tie offers to marketing campaigns, are helping to move the market forward with the development of mobile payment services and technologies, according to the report.

Possible roadblocks for m-commerce include high infrastructure costs, the need to standardise software and hardware and the possibility of new regulations to cover this area, Merry points out.

However, Merry writes, the fact that the EU is working toward a coherent approach for electronic payments bodes well - as it reveals there could be an impetus to creating a similar plan for mobile transactions as well.

More information about the report, titled Mobile Transactions - Evolving Models of Payment in the Mobile Content, Commerce and Retail Marketplace, can be found at the ARC Group's website.