Mobile financial services set for wide adoption

The global market will handle £300bn of transactions over the next three years

Mobile-based financial services are becoming increasingly popular

The market for mobile financial services is predicted to boom over the next three years, reaching a total of 41.5 billion transactions by the end of 2011.

The sector will gain an additional 517 million users between 2007 and 2011, to an overall total of 612 million, according to analyst Juniper Research. The combined activities of this group will generate more than $587bn (£301bn) of financial transactions.

The new users will largely come from two sources, said the study: Phone owners in developing countries that do not currently have access to bank accounts, and young people aged 13 to 18 in developed countries who are currently too young to engage in such activities.

But while the rapidly-growing sector will create new business opportunities, regulatory issues could pose a challenge to the industry.

"Most developed world economies have strict rules and regulation governing the financial industry, to protect both the consumer and the retailer," said Juniper Research in a statement.

"It can be a costly exercise, in both time and money, to design and implement an alternative mobile payment scheme that adheres to such regulation, particularly the case with mobile fund transfers and remittances potentially offering an easy route to money laundering around the world."