The value of mobile transactions across the Middle East is set to be worth some US$27.6 billion by 2017, according to the research firm Gartner.
Value of mobile transactions in region to take off
The value of mobile transactions across the Middle East is set to be worth some US$27.6 billion by 2017, according to the research firm Gartner, accounting for about 4 per cent of the global value, up from less than 1 per cent today.
The compounded annual growth rate for the Middle East is expected to be 80 per cent from last year to 2017, more than double the global rate of 35 per cent.
"Mobile transactions in the Middle East is mostly driven by money transfer because of the larger immigrant population from other countries who need to send money home," said Sandy Shen, the research director in the consumer services team at Gartner.
"This is the biggest form of mobile payment in the region and that is driving a lot of the value.
"We expect that money transfer of both domestic and international remittance will account for 90 per cent of transactions."
It is not just remittances, but also business-to-business and business-to-consumer payments that will also take hold, including salary payouts and bill payments for government services in the region.
The value of worldwide payment transactions is expected to reach US$235.4 billion this year, a rise of 44 per cent from 2012.
By 2017 this value will reach $721bn with more than 450 million users.
This growth, however, is slower than previously forecasted, because of the global lack of adoption of near-field communication (NFC) technology.
The contactless method of payment was predicted to be one of the main drivers of growth in this sector, but the technology has failed to take off with consumers who fail to see the value in it.
"Apart from the technical reasons as well as mobile phone and contact card reader penetration the biggest hurdle to NFC is the lack of value for consumers.
"It does not provide a stronger value proposition over cash or plastic card payment for consumers yet," said Ms Shen. In the Middle East many operators have been rolling out contactless infrastructure and deploying NFC payment services, although it is still in its very early stages.
"In the UAE and Saudi Arabia it is more about transferring money between people than NFC," Ms Shen said.
"Gartner forecasts that NFC will account for only about 2 per cent of global transaction value this year and 5 per cent in 2017.