Mobile Payment Adoption: A Global Snapshot

For as quickly as it may seem that mobile commerce is taking off in the United States, that’s really a relative perception. According to Euromonitor International’s Consumers in the Digital World: Hyperconnectivity and Technology Trends, a full quarter (25%) of in-store mobile shoppers in emerging markets pay with their mobile device at least once per week—but that figure for consumers in developed markets is under 10%.

To understand why this is the case, it helps to be familiar with what’s influencing—or hindering—mobile payment adoption around the world. Is it that some countries have more smartphone users? Is it that more difficult for businesses in other countries to implement mobile payment technology? Does a country’s legal system make it or break it? There’s no simple answer, or complicated algorithm, for that matter, to explain why some countries are farther along in the mobile payments space. Complexities abound.

Identifying the “Whys” Behind Global Discrepancies

MasterCard Worldwide, however, offers significant insights through a comprehensive, data-driven survey of the mobile payments landscape. Their Mobile Payments Readiness Index gauges the readiness for the three types of mobile payments (person to person, point of sale, and m-commerce) in 34 global markets. Here’s a breakdown of the index components and current research highlights:

• Consumer Readiness measures how familiar with, how willing to use, and how frequently consumers are currently using mobile payments. It shows that 9 out of 10 leaders in the consumer readiness component are located in the Middle East, Asia, or Africa. Category Leader: Kenya, where 89% of people are familiar with mobile payments and 68% of consumers are frequently making mobile person-to-person payments
• Environment measures economic, technological, and demographic factors within a market by factoring in household expenditures per capita, urbanization rates, Internet usage, and firm-level technology absorption. Category Leader: United Sates, where annual household consumption expenditures are $33,000. For Kenya, that figure is $609.
• Financial Services measures the effectiveness and penetration of consumer financial products. Category Leader: Japan, with a 91% for how well they treat customers. Plus, the country’s average payment card per person is 14.98.
• Infrastructure measures the sophistication and penetration of the mobile phone industry and NFC terminalization. Category Leader: Singapore, where mobile phone penetration, at 100%, is above the index average of 94%.
• Mobile Commerce Clusters measures partnerships among banks, mobile networks, and governments. Category Leader: Canada, where the cooperation among these groups is exemplary. What’s more, a Canadian mobile network recently filed to be a bank under the Canada Bank Act, demonstrating the potential for one entity to manage both telco and financial services.
• Regulation measures legal and regulatory structures and how they affect businesses. Category Leader: Singapore, whose well-developed laws relating to information and communication technology rated 84 out of 100. Their legal system’s efficiency at settling disputes earned them a 90 out of 100.

Top 5 overall index scores (on a 0-100 point scale):
1. Singapore 45.6
2. Canada 42.0
3. United States: 41.5
4. Kenya: 40.4
5. South Korea: 39.7

Lowest 5 overall index scores (on a 0-100 point scale):
1. Mexico 27.7
2. Hungary 27.0
3. Italy 25.5
4. Indonesia 24.0
5. Argentina 22.4

MasterCard’s index points to the many interrelated factors behind a nation’s readiness to embrace mobile payments. While shedding light on a range of marketplace dynamics, it hits multiple angles, showing just how complex the world economy can be when disruptive technology starts making its mark.

Mobile payments adoption is a topic with no shortage of heavy-hitting analyses: it’s a global phenomenon with a constant spot in the headlines. Mobile commerce is changing the way retailers operate and the way shoppers behave, and industry players are eager to know not only what’s next, but what’s now—and why.

Stay tuned for more on the fast-moving world of mobile payments.