The market for mobile phone financial services in Western Europe will surge from almost zero to between 4 billion and 5 billion euros ($6-7.5 billion) by 2013, research firm Frost & Sullivan said on Thursday.
Telecom operators, banks and handset makers like Nokia are increasingly looking at the opportunity to find additional revenues from mobile financial services.
This is one of the biggest opportunities out there for mobile. The potential is enormous but it is a very complex business, said Teppo Paavola, head of Nokia's Money service.
Paavola, quoting independent research firms, said the global mobile financial services market would reach 18 billion euros in 2014. So far the take-up of such services has been limited mostly to a few emerging markets, as in developed countries the popularity of online banking and security worries have hurt takeoff.
Operators and banks alike are still building consumer trust in terms of transferring money and paying bills over the phone, Frost & Sullivan analyst Sharifah Amirah said in a statement.
Amirah said the level of transaction costs and ease of use of the services will drive take-up in the coming years.
Paavola agreed, saying that while in emerging markets mobile financial services were needed to connect those without a bank account, in developed markets ease of use would be key.
It has to be as easy as paying with card or cash, he said.
Nokia has bought a stake in mobile financial technology firm Obopay and will also co-operate with banks to roll-out the services. Its scheduled to open the service early next year.
The focus is on emerging, growth markets, Paavola said, but declined to specify the markets where the service would be opened first as that would depend on deals with banks and regulatory approvals.
($1=.6668 euros) (Reporting by Tarmo Virki; editing by Simon Jessop)