Mobile PtoP Payments: MasterCard's Partnership with Obopay Demonstrates Why This Market Deserves Attention

Implications: Mobile PtoP payments are a disruptive technology that must be monitored by financial industry investors, because it requires no hardware infrastructure change, and can be adopted by consumers today to send payments between individuals. All leading payments brands, banks, and processors could be affected by growth in mobile PtoP payments, and Javelin's research data shows that this is a technology that consumers are ready for now. With much focus on interchange fee and bank profitability, the potential for mobile PtoP payments to change payments-fee models is important to monitor.

Analysis: There isn't enough attention being devoted to mobile PtoP payments, even while banks flock to mobile banking and the payments industry (Visa, MasterCard, Vivotech and others) invests heavily in contactless payments. Mobile banking and contactless payments indeed sets the stage for eventual growth of mobile payments at physical point-of-sale, and the fortunes on many companies will change as a result. Yet while mobile payments requires wholesale changes in consumer and merchant behavior, mobile PtoP payments could become rapidly adopted, just as PayPal has become used by 25% of the online population in the U.S. in just a few years. Javelin has an exclusive forecast on growth of the PtoP market in the US, and analysis of the vendors in the space.