The emerging global markets that lack broad access to financial services likely will represent the greatest potential for mobile payments initiatives.
A report from Macquarie Equities Research Group argued that the major card brands should invest in these markets. However, a separate study predicted that half the world's phones enabled with near-field communication technology, which many consider an essential component of mobile payments, will be in use in North America by 2014.
In the April 11 report, Macquarie said mobile payments overseas have more potential to drive profitable growth for the major existing market players such as Visa Inc. and MasterCard Inc. because they possess a broad international footprint.
"In the developed world, we view NFC and the ability to make mobile-proximity payments as promising, but [we] are less excited about their potential to drive profitable growth," the report said.
Macquarie said Visa and MasterCard will play integral roles in connecting the unbanked to financial services via mobile phones, which in turn should help raise the card brands' projected share value by the end of the fiscal year. The firm's revised price targets for Visa shares are $107, up from $90 set at the beginning of the fiscal year; and $333 for MasterCard, up from $288.
Macquarie suggests any of three intermediate to long-term catalysts could drive mobile payments.
Mobile should increase the speed with which electronic payments emerge in underdeveloped markets, the report said. And mobile devices should greatly benefit countries that lack the infrastructure to support a large volume of plastic payments.
Mobile payments also might help the card brands gain favor with regulators, the report said. "Many regulators around the world believe that the payment networks are too profitable and need to be regulated," the report said. Macquarie said regulators view mobile payment initiatives favorably because they connect underbanked consumers to financial services.
The report said that mobile payments represent an opportunity for the payment networks to address merchants' needs in developed markets. Merchants have become frustrated over time with what they view as a high cost for accepting electronic payments. The networks should present mobile technology to merchants as a way to drive greater sales volume through services such as loyalty programs, the report said.
In another mobile payments-related study, Juniper Research estimated 300 million NFC-enabled phones will be available by 2014, led by North America with half that total. France also is off to a strong start, with some 1 million phones expected by the end of this year, according to Juniper.
The London research company predicted smartphone users in North America, Western Europe and other developed regions quickly will accept NFC mobile payments and marketing activity around coupons and posters equipped with NFC chips.
