Mobile penetration vs banking penetration = APAC m-commerce growth: Frost

• Spurred by affordable smartphones and increased online retailing
• However, mobile payment lacks interoperability of conventional payments

NUMEROUS developing economies in Asia Pacific have low banking penetration rates, especially in the suburban and rural areas. In contrast, mobile penetration rates are impressively high, even crossing 100% in some countries.
 
This has created opportunities for mobile operators to partner with banks, payment providers and merchants to develop new models of transactions, Frost & Sullivan said in a statement.
 
As a result, the mobile commerce (m-commerce) market – mobile banking, mobile remittance, and mobile payment – is expected to growth at a healthy rate over the medium term, the research and consultancy firm said.
 
Its Analysis of the APAC Mobile Commerce Market 2013 report finds that the market earned US$76.17 billion in 2013, expected to grow to US$153.26 billion in 2017.
 
For this research, Frost & Sullivan's analysts examined the following: M-commerce transaction value; transaction breakdown; m-commerce as a percentage of e-commerce; users; and the competitive landscape.

M-commerce has taken off in a big way due to the affordability of smartphones in emerging markets, the company said.
 
The proliferation of smartphones has created additional forms of mobile payment channels that were not available in the past. For instance, prepaid credits in the account of mobile subscribers are being increasingly used as a medium of exchange in private peer-to-peer (P2P) and commercial transactions, even if the subscriber does not have an existing bank account.

Operators have begun to exploit the range of mobile technologies available to users and this, in turn, has allowed retailers to offer mobile shopping via mobile applications. These apps make product browsing, price comparison, reviews and payment modes more convenient than ever before, Frost & Sullivan said.
 
Another important reason that m-commerce has found firm footing in Asia Pacific is the declining costs and form factors of sensors.
 
Sensors in smartphones have the ability to capture real-time contextual information such as the location of subscribers, and eventually aid merchants with such data, the company said.

“Mobile operators can offer new services in conjunction with app developers and merchants to make relevant information available to consumers and thereby, capture valuable opportunities at the right time,” said Frost & Sullivan ICT senior industry analyst Serene Chan.

However, mobile payment currently lacks the interoperability of conventional payment modes such as credit and debit cards. The infrastructure of mobile payment in most retail outlets is inadequate, as there is no single mobile payment application that is common to all points of sale.
 
Until disparate functions are converged through a single platform for a seamless shopping experience, cash will continue to play a dominant role in micropayment in the mass market.
 
“Acknowledging the need for convergence, mobile operators and banking institutions are adopting a collaborative mobile payment model to achieve compatibility across platforms and devices for mass market adoption,” said Chan.

“Incorporating pre-sales marketing and after-purchase activities into the value chain process will also go a long way in changing consumers’ existing payment habits,” she added.

Analysis of the APAC Mobile Commerce Market 2013 is part of the Mobile & Wireless Communications (http://www.wireless.frost.com) Growth Partnership Service programme at Frost & Sullivan.
 
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