MasterCard Analysis of Mobile Payment Readiness Finds Industry Integration Critical Factor

The MasterCard Mobile Payments Readiness Index (MPRI), an analysis conducted by MasterCard Worldwide, ranked 34 global markets between October 2011 and February 2012 based on their readiness to adopt three different types of mobile solutions for processing payments.

The MPRI considered consumer use of mobile web commerce (m-commerce), person-to-person funds transfers (P2P), and mobile contactless point-of-sale (POS) transactions as part of the study, and determined that no two markets were the same. At the top of the list, the five most prepared mobile markets were identified as Singapore, Canada, the United States, Kenya, and South Korea.

Every country was ranked on a scale of 1 to 100 with scores calculated based on a combination of proprietary consumer research and inputs of weighted demographic, economic, telecommunications and payment industry data sorted into Environmental, Financial, Regulatory, Infrastructure, Clusters and Partnerships, and Consumer Readiness Components that were combined to produce a single readiness score for each market.

Although in the early stages of mobile payment integration, according to the Index, all worldwide markets are progressing towards the point where a significant proportion of the payments mix will consist of mobile devices. This includes technology-driven smaller markets like that of Singapore, and larger more integrated ones to include the United Kingdom.

Also, where younger more affluent users value convenient alternatives to cash or payment cards, such as in Australia, there was a greater willingness to utilize mobile payment systems. Such consumers tended to be largely male, although in Egypt, the Philippines, and China women expressed greater interest.

Other findings included that the most popular form of payment solutions across all countries involved m-commerce, using the web as the primary resource in 71 percent of the countries surveyed in the study.

The motivating factors for using mobile devices for payments also vary by region and socioeconomic status. For example, in developed economies, consumers prefer processing payments by phone because of the convenience, whereas those located in developing countries typically desire to gain access to the national and global economies that have been out of reach in the past, as well as operate within a more secure and regulated financial infrastructure.

In fact, nine of the 10 economies with their consumer scores the highest according to the Index were situated in the Asia/Pacific, Middle Eastern, and African regions.

The MPRI, besides establishing that consumer readiness is the critical factor necessary for successful large-scale mobile payment adoption, also concluded that industry partnership is an essential component. Theodore Iacobuzio, vice president, Global Insights at MasterCard Worldwide, stated that “Technology Infrastructure, a responsive regulatory environment and a robust economy are table stakes" for the advancement of mobile payment solutions.

Collaborative and cooperative efforts between key players, such as technology providers, government, financial institutions, and telecommunications companies, is necessary to foster an environment that will accelerate broad mobile payment commercialization and enable critical mass to be reached within the market.