The value of mobile payments in 2016 is predicted to reach $617bn as the number of mobile users worldwide reaches 448 million.
According to Gartner, mobile payments are set to increase 62% in value this year to $171.5bn compared with $106bn last year. Gartner expects an average 42% annual growth in transaction values between 2011 and 2016, taking it to $617bn.
Gartner says the market will be fragmented with different technologies used to access services in different locations.
"There will be a few global players that have the scale and resources to serve large customers and the mass market whose requirements can be readily satisfied by standard solutions," said Sandy Shen, research director at Gartner.
"However, there will always be segments that cannot be sufficiently served by the global players.
"The demand of these segments can only be satisfied by specialised or local players who can better understand the segment and have specific solutions to meet the unique challenges."
In Western Europe, 80% of mobile payments will be made through the web by 2016, said Gartner. This is because mobile internet is common on devices. In the developing world, SMS will be the favoured transaction technology.
But near field Communications (NFC) payments will take longer to become established.
"NFC payment involves a change in user behavior and requires collaboration among stakeholders that includes banks, mobile carriers, card networks and merchants," said Shen.
"It takes time for both to happen, so we don't expect NFC payments to come into the mass market before 2015. In the meantime, ticketing, rather than retail payment, will drive NFC transactions."
Banks are introducing mobile payments services in the UK. In February Barclays bank launched an application, known as Pingit, that will enable mobile phone users to make free payments to other UK mobile users directly.
More than 120,000 people downloaded Barclays Bank Pingit mobile banking app within five days of its release. The application followed the bank’s work on a private cloud that will underpin the app, as well as a raft of cloud-based mobile banking services set to follow.
Banks face a decision over mobile banking platforms. Do they build their own unique systems or share one as a utility?
In the 1990s, banks knew customers would want to bank from home, so they built their own internet banking platforms.
They invested heavily in internet banking platforms, in the belief that they could differentiate, but it turned out those platforms do not offer differentiation.
Now banks know customers are taking up mobile payments, they will have to decide whether to invest individually or share transaction infrastructure, as now do for traditional payments.