Mobile payments worldwide will grow significantly in transaction volume and value in 2013, but Near Field Communication payments won't be part of that momentum in North America, according to new Gartner research.

The predicted overall transaction value for NFC contactless payments was reduced by more than 40% in a forecast Gartner released June 4. The reduction stems from "disappointing adoption of NFC technology" in 2012.

High-profile services that use NFC, including Google Wallet and Isis Mobile Wallet, "are struggling to gain traction" in North America, according to the research and advisory company's 2013 worldwide mobile payment forecast.

As such, Gartner has backed off last year's prediction that NFC payments would total $38 billion by 2016. It now forecasts that number at $22 billion. North America's overall mobile payment transaction value will reach $37 billion this year, up 53% from $24 billion in 2012, Gartner says.

Representatives from Google and Isis did not respond to requests for comment about the Gartner study.

"The biggest hurdle to NFC payment is the lack of user value proposition," says Sandy Shen, a China-based research director at Gartner and author of the report.

Another hurdle is technology, including mobile phones and reader infrastructure, but these can be easily addressed as the time passes, Shen says in an e-mail interview.

"Service providers need to have convincing reasons for people to switch from cash or cards to mobile phones," Shen adds.

Despite a bumpy road for NFC, Gartner forecasts worldwide mobile payment transaction volumes will reach $235.4 billion in 2013, a 44% increase from 2012 values of $163.1 billion. The number of mobile payment users worldwide will reach 245.2 million in 2013, up 22% from 200.8 million last year.

"We expect global mobile transaction volume and value to average 35% annual growth between 2012 and 2017, and we are forecasting a market worth $721 billion with more than 450 million users by 2017," Shen says.

"Nevertheless, we have lowered the forecast of total transaction value for the forecast period  (through 2017) due to lower-than-expected growth in 2012, especially in North America and Africa," Shen adds.

Gartner expects NFC growth "to increase somewhat" during 2016 when the penetration of NFC mobile phones and contactless readers increases. Gartner expects NFC will account for about 2% of total transaction value in 2013 and 5% of the total transaction value in 2017.

Money transfers represent the most common mobile payment transaction and will account for about 71% of total transaction volume this year, compared to 21% for merchandise purchases, Gartner predicts.

A mix of personal and business money transfers will account for almost 69% of the total mobile payment value in 2017, Gartner predicts.

"Examples include domestic or international remittance, salary payout, government benefit distribution or supplier payments," Shen says.

Consumers typically do not use mobile payments for larger transactions such as shopping, the report says. As such, merchandise purchases will account for about 23% of the total value forecast for 2017. 

Bill payment through mobile devices will grow consistently because of higher value-per-transaction figures as more consumers in developed markets pay bills through mobile banking services, Gartner says.

Consumers in emerging markets also are completing more high-value bill payments than originally forecast. Bill payments will account for about 5 percent of the total value forecast for 2017. 

Gartner predicts South Korea and Singapore, and developing markets in India, will drive Asia/Pacific's mobile payment transaction value to 38% growth in 2013 at $74 billion. As a result, by 2016, Asia/Pacific will overtake Africa to become the largest region by transaction value, reaching $165 billion in mobile payments. Africa's transaction value is forecast to reach $160 billion in 2016.

Western Europe's transaction value is expected to reach $29 billion in 2013, up from $19 billion in 2012.

Ultimately, the consumer has the say in how mobile payments will develop, Shen says.

"So long as people see benefits in using mobile phones to pay over using cash or cards, they will take it up willingly," Shen says.

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