The total value of all mobile payments made this year will be over £109 billion, up 62% from 2011, according to a report from Gartner.
The analyst company predicts that global transaction value will grow on average 42 annually for the next five years, reaching £400 billion in 2016.
However, the mobile payment services market will remain fragmented for the next two years, Gartner said. "There will be a few global players that have the scale and resources to serve large customers and the mass market," said Sandy Shen, research director at Gartner. "[But] there will always be segments that cannot be sufficiently served by the global players."
In the US and Europe, most mobile payments will take place over the web – i.e. smartphone users shopping online. Contactless or near-field communications (NFC) payments via smartphones will take longer to catch on, said Shen.
"NFC payment involves a change in user behaviour and requires collaboration among stakeholders that includes banks, mobile carriers, card networks and merchants," she said. "It takes time for both to happen, so we don’t expect NFC payments to come into the mass market before 2015. In the meantime, ticketing, rather than retail payment, will drive NFC transactions."
SMS will remain the dominant mobile payment technology in developing countries. Gartner forecasts Africa as the region with the highest mobile payment transaction value through to 2016.
The report came as online payments provider Paypal launched a new mobile app that allows customers to pay for goods in stores by producing a bar code on the smartphone’s screen. The retailer scans the bar code and the customer’s PayPal account is debited.
The app will launch in partnership with fashion retailers fashion chains Coast, Oasis and Warehouse as well as Karen Millen.
"2016 will be the year you won’t need a wallet to shop on the British high street," said Cameron McLean, PayPal UK’s managing director. "A phone will be enough."