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30th January 2006

Has the market driver for m-payment finally emerged?

At a recent industry-leader workshop, key decision-makers from across the transport sector identified the ubiquitous mobile phone as the key constituent of the Intelligent Journey - where the public plans journeys using a variety of transport modes and taking elements such as cost, pollution and time into account. The conclusions from the workshop have been summarised in a report, which is released tomorrow. And according to the authors of the report, this concept could provide the key driver for the much-heralded mobile payment (or m-payment) market, which has so far not lived up its projections (Jupiter Research, 2004: $40bn by 2009).

"The whole concept of using your mobile phone to pay for the train or parking has been around for a number of years. It has promised a lot in terms of ease-of-use, yet to date it has failed to live up to that hype. This is not the fault of the technology, but more that there has not been the killer application to kick start the deployment," commented Dr Peter Bell of Cambridge Consultants. "At the Intelligent Journey workshop we discussed key aspects of the Intelligent Journey including the role of road user charging, which the UK government is looking at introducing nationwide. The workshop delegates identified a mobile phone based 'pay-as-you-go' service as the most likely way of achieving general road user charging. This could be the initial killer application that kick starts the lucrative m-payment market. With this major initiative, involving both the transport sector and Government, m-payment is likely to become a mainstream technology, in the same way that Bluetooth did when the UK government boosted the hands-free market through a change is legislation."

The workshop was hosted by Cambridge Consultants and Arthur D. Little. Delegates were tasked with discussing the concept of the Intelligent Journey and how the various parts of the 'jigsaw' needed to fit together to improve the reliability and reduce the impact of travel. They concluded that the transport sector and Government needed to work together to change the attitudes of the public when planning journeys and then establish a policy framework where a whole value chain could be created. These important steps are required before the technology can be discussed in any detail, however the group was unanimous when it came to the core platform - the mobile phone.

In 2004 renowned market analysts Jupiter Research predicted that the market for m-payment would be worth $40bn by 2009, however, Dr Bell feels that the industry's expectations of timescales needs to be adjusted.

"Once people become used to paying their road fees by m-payment, other aspects of the Intelligent Journey such as multi-modal journey payments will follow rapidly. However, with road user charging first being rolled out over the next ten years, other m-payment applications will follow on similar timescales."

The report can be requested free of charge by clicking here.

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