• by Steve Smith  @popeyesm, June 5, 2013

Mobile payment transaction value is set to increase on average 35% annually between 2012 and 2017 -- amounting to $721 billion from 450 million users in the coming years, according to Gartner. But the research and forecasting firm says that such growth is still slower than it expected previously. “We have lowered the forecast of total transaction value for the forecast due to lower-than-expected growth in 2012, especially in North America and Africa,” said Sandy Shen, research director.

The main element putting the brakes on what otherwise could be meteoric growth is continued disappointment in the expansion of NFC payments. Gartner has reduced its estimates of NFC transaction value by more than 40% because of much-lower-than-expected adoption. The company notes that early attempts to leverage mobile payments mainly through NFC such as Google Wallet and the ISIS Consortium are not catching on. And so NFC transactions will only be responsible for 2% of the total mobile payment value in 2013 and 5% in 2017. The company says the NFC market should finally start accelerating after 2016.

While hundreds of billions of dollars are already being transacted, 71% of that is actually in money transfers, and 21% in actual merchandise purchases this year. There is considerable friction in purchasing items on mobile devices, Gartner contends, and even looking forward to 2017 the company only sees merchandise purchases accounting for 23% of all mobile transactions.

Nevertheless, Gartner projects that worldwide mobile payment transactions will reach $235.4 billion this year, up 44% from last year. More than 245 million people will have made mobile payments. In North America, transaction values will be up 53%, reaching $37 billion. But Gartner says that this region in particular has been impacted by the low rate of adoption of NFC technologies as well as merchants launching mobile experiences without a clear strategy.

"Mobile Payments" photo from Shutterstock.