Telcos should partner banks and payment providers to capitalise on the growing mobile commerce (mCommerce) market in the Asia Pacific region. According to Frost & Sullivan's new study-'Analysis of the APAC Mobile Commerce Market 2013'-the mCommerce market in Asia Pacific is expected to reach US$153.3 billion by 2017, an increase of US$77.1 billion from last year.
The consulting firm said in a press statement that mCommerce has taken off in a big way in Asia Pacific, and attributed this to the proliferation of smartphones, which is in turn fueled by the affordability of such devices in emerging markets. It said that the large base of smartphone users has propelled companies to offer new forms of mobile payment services too. For instance, two telcos in the Philippines-Smart Communications and Globe Telcom-now offer e-wallets that allow fund transfers via smartphones.
Another driver of mCommerce in the region is the declining costs and form factors of sensors, it said. Since the sensors in smartphones are now able to capture real-time information such as the users' location, merchants are able to use such data to "capture valuable opportunities at the right time," said Frost & Sullivan ICT senior industry analyst Serene Chan.
While mobile payment is poised to be the next preferred payment method, it currently lacks the interoperability of conventional payment modes such as credit and debit cards, the Frost & Sullivan study noted. And 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 Asia Pacific. As such, mobile operators and financial institutions should adopt a "collaborative mobile payment model to achieve compatibility across platforms and devices" in order to further drive the growth of mobile payments, Chan said.