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Internet and Mobile 'Micropayments' Market to Hit 11

Billion by 2009, Research Group Says

Credit Pacific Service Union By Peter Shout

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Credit First Service Union According to TowerGroup, the Internet and Mobile Micropayments market will grow from $2 billion to $11.5 billion by 2009, a 23% compounded growth rate.Visit our AXcess News Forum and add your comments on this story. Try your hand at writing, the best story will be published on our news network. Take our technology poll too!

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Card Credit Discover Service Aug 3, 2004 (AXcess News) Needham MA - According to TowerGroup, the Internet and Mobile Micropayments market will grow from $2 billion to $11.5 billion by 2009, a 23% compounded growth rate.

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Credit Public Service Union The dot-com bust spelled the end of several early attempts to launch alternative currencies and payment methods for small online transactions - including high-profile start-ups like Beenz and Flooz. However, discussions around the potential for "micropayments" (transactions under $5) in the mobile, Internet and point-of-sale spaces continue, with an emphasis on how to minimize processing and customer service costs to ensure the profitability of very low value transactions.New research from TowerGroup finds that several positive trends are now beginning to converge, spurring both the use of and demand for mircotransaction engines. While demand is still concentrated in a few hot areas of content development, it is laying the foundation for more rapid and tangible growth.

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Card Credit Processing Service "As technology has advanced so have customer expectations and networks, and these factors are setting the stage for expanded micropayments growth across the mobile, Internet and physical channels," said Ed Kountz, senior analyst in the Emerging Technology Solutions practice at TowerGroup and author of the research. "By 2009, TowerGroup expects the total market for Internet and mobile micropayments in the US to increase 23% (compound annual growth rate) to $11.5 billion in revenues, up from just over $2 billion in 2003."Advertisement

Center Credit Service Union At present, the total market for micropayments remains small in comparison to the multi-trillion-dollar consumer payments market. In 2003, the total value of Internet micropayment transactions in the US was $1.9 billion -- driven primarily by media and Internet publishing services, and digital music (e.g., iTunes), and other audio services. Mobile micropayments sales in the US (such as for content like ringtones) accounted for $0.15 billion in 2003.

Card Credit Service Wireless Kountz noted that over the next five years, TowerGroup expects to see heavy competition in the micropayments space, with a handful of leading transaction types finally joining subscriptions in taking a significant share of this fluid market space.

Credit Security Service Union "Direct-to-bill will continue to proliferate in the mobile space, aggregation-based solutions will gain traction for some types of Internet content, and prepaid will round out the payment options across other mobile and e-content environments. Financial institutions should begin considering how these changes will impact their payment businesses, and determine how to build out alternative payment services as extensions of existing products for certain emerging groups," he said.AXcess News will be reporting on any new market trends related to this story. Members should watch their in-box for late breaking news. If you're not a member, consider joining now. Members get the latest business news, commentaries and stock picks delivered right to their in-box.

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