Wireless P ayments to Increase to USD20 billion by 2005

Mobile payments revenues are set to grow dramatically to USD20 billion in 2005worldwide, according to a new strategic report from ARC Group. This figure represents an annual growth rate of over 100%, and is mainly derived from new types of transaction such as prepaid top up via automatic teller machines (ATMs).Current forms of mobile payments include premium SMS messages, which can be reverse billed or easily charged to subscribers' accounts along with airtime.

These will be followed by prepaid topup services, either direct from linked accounts or from ATM
networks. Virtual payments are the next generation of mobile payments, and will be used for a wide variety of digital content which is purchased remotely online.

Finally, as the retail infrastructure is built out, local point of sale payments (proximity payments) will begin to develop, allowing mobile users to pay for goods and services in retail outlets and at vending machines.The newer generation of ATMs and vending machines will increasingly be able tocommunicate with mobile phones, giving consumers the opportunity to gain access to virtual cash and to build up loyalty bonus points. This will mean a repositioning of the players in the value chain, with mobile network operators partnering with credit companies and banks to offer an integrated package of content and payment facilities.

Richard Jesty, lead author of the report says: "These new payment trends are already happening in the Asia Pacific region. We're seeing vending machines that are able to talk to mobile phones and provide not just canned drinks but personalised city guides and entertainment information. Mobile ticketing projects are also underway in Japan for example which will enable travellers to use their phones as season tickets with built in credit facilities."Longer term, ARC Group sees the option of being able to use a virtual credit card asoffering significant potential in the macropayments sector (that is for transactions where the value is over USD15). This may favour the larger credit card operators, which already have international brands and technical infrastructures and are moving in the direction of multi-access payment systems. Both Visa and Mastercard are working with the network operators and banks to test a number of mobile payment methods, ranging from a point of sale retail system to a server-based m wallet. Combined with new methods of ensuring that remote transactions are secure, these mobile payment systems will enable virtual debit or credit cards to be used for local retail payments as well as online purchases on the internet.In both the micro and macropayments sectors, new business models are key to growing the market for mobile services by offering alternative ways for consumers to pay easily, and for value chain players to share revenues profitably.

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TODAY'S PRESS RELEASES

This figure represents an annual growth rate of over 100%, and is mainly derived from new types of transaction such as prepaid top up via automatic teller machines (ATMs).Current forms of mobile payments include premium SMS messages

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