Widespread adoption of mobile payments via near field communication is still at least two years away, according to a global survey by Sybase 365, a subsidiary of Sybase Inc.

Forty percent of respondents cited the main inhibitor of widespread mobile payment adoption was a lack of coordination between key stakeholders, including mobile operators, merchants, payment processors, banks and developers. While NFC will help further enable mobile payments, successful and established mobile technologies, including SMS and USSD, are already leading the development of the ecosystem today, per Sybase. 

“The main finding is that the mobile industry recognizes that for mobile payments to take off, a concerted effort is needed from all the players—carriers, banks, handset manufacturers and merchants,” said Diarmuid Mallon, London-based senior product marketing manager at Sybase 365. “The big surprise was the gap between the industry’s expectation of when NFC will happen, when compared to a lot of the press coverage over the last few months.

“Most people interviewed saw NFC being at least two years out,” he said. “Even the most enthusiastic region, the Americas, only 49 percent thought NFC mobile payments [would achieve scale] within a year.”

Sybase 365 is an aggregator specializing in mobile messaging and mobile commerce services. Sybase Inc. is a subsidiary of SAP AG.

Ever-receding tipping point?
For mobile commerce to take off, industry stakeholders must harmonize their efforts in the same way that led to proliferation of SMS and MMS technologies, per Sybase.

In markets where multiple parties are working together, such as mpass Germany and paybox Austria, there are successful ecosystems where end users can pay for a multitude of goods and services via the mobile.

Mobile channels such as SMS, the mobile Web and applications are already being implemented by merchants worldwide.

The challenge facing NFC is how to make the consumer payment experience significantly faster and easier than it already is, per Sybase.

Among 251 attendees polled at GSMA Mobile World Congress last month, 76 percent believe mobile proximity payments using NFC technology is still at least two years away.

The lack of industry coordination was cited by 30 percent of respondents as the main culprit for delayed NFC adoption. 

Other challenges included lack of NFC readers at point-of-sale (26 percent) and inadequate handsets (25 percent), which were cited as inhibiting the rapid deployment of mobile payments. 

“The clear message from those we spoke to is that for NFC mobile proximity payments to be a success, is for cooperation and coordination across all stakeholders,” Mr. Mallon said. “Merchants and retailers need to ensure they have a mobile strategy in place, and beyond that to start preparing for mobile payments.

“This can be as simple as perceptively collecting their customers’ mobile numbers to starting to use the mobile channel today to start building consumer confidence,” he said.

Other forms of mobile payments have had more than a ten-year headstart on NFC.

The first premium SMS services went live in the early 2000s, and countries such as Japan and Austria have had mobile payments for real-world goods and services for a similar amount of time.

Mr. Mallon said that in the last few years developed and developing economies have had a marked difference in their approach to mobile payments.

In developing economies the focus today is very much on remote mobile payments.

In these economies there is a large proportion of unbanked, and so carrying and sending money is a major challenge, so remote payments provide a huge benefit.

Existing mobile technologies—SMS, USSD and WAP—are being used, rather than waiting on new technology such as NFC.

“In developed economies, it certainly clear that many countries are focusing proximity payments for their lead mobile payment services,” Mr. Mallon said. “But even here we see a split, with some markets waiting for NFC, whilst others launching interim solutions.

“The advantage of the latter approach is that they are creating momentum today—you need an eco-system of merchants and customers,” he said. “That’s the final frontier.”

Final Take
Sybase 365