The mobile payments market will see a battle among giants as the major players vie to remain leaders within their core businesses – amongst card issuers, mobile operators, handset manufacturers, retailers and internet players – says IDATE.

A report by the consultant and researcher looks at several business models – near field communications (NFC), SMS, fixed/mobile wallet & App Stores, and at their impacts and upcoming opportunities.

“Mobile payment is a complex market, with many technical alternatives addressing different marketing targets based on different business models,” commented Sophie Lubrano, director of studies at IDATE. “At least, four main solutions should be clearly distinguished – SMS-based payments, fixed-mobile wallets, app stores payment and NFC – with regards to their contrasting potential and competition landscapes. The complexity is also coming from the value chain: the mobile payment market brings together major players, which are all leaders within their core businesses: card issuers, mobile operators, handsets manufacturers, retailers, Internet giants, and also start-ups. And currently usages are still low.”

IDATE identified mobile operators of having the widest range of services; Internet giants as providing essentially fixed-mobile wallet services, with an extension to application storefronts – in particular Google; Apple payment solution as relying on iTunes accounts; cards issuers as focusing on NFC, as well as retailers; and start-ups as having a wide range of services, although not on the NFC market.

The SMS-based market is less competitive, with mobile operators ruling here, although IDATE said it could be a ‘cash cow market’ for operators generating high margins and is experiencing rapid growth in emerging countries. PayPal, Amazon and Google dominate the mobile wallet market; and when it comes to app payments, Apple, Google and Nokia are battling for the top spot.

NFC, however, is an open market, with the potential to be huge as it can address the specific requirements of the retail payment market. Competition, however, is fierce between players are many are leaders in their core markets. IDATE said the development of contactless services, such as ticketing, loyalty-programme management and access control, will help to drive mobile NFC payment.

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