Gartner has cut its predictions for the growth of mobile payments in the coming years after uptake in 2012 was slower the expected. 

Mobile payments are certainly growing – Gartner predicts the global transaction value of all mobile payments will reach $235 billion this year, up 44% from 2012. 

"Nevertheless, we have lowered the forecast of total transaction value for the forecast period due to lower-than-expected growth in 2012, especially in North America and Africa."

Most of this value will not come from retail or online payments but money transfers, which are substantially cheaper on mobile phones. Gartner predicts that 71% of total mobile payment transaction value will be made up of money transfers. 

"Worldwide, people are not purchasing as much because the buying experience on mobile devices has yet to be optimised," the analyst company said. "People are spending less via mobile devices than via online e-commerce services and at retail outlets."

Contactless payments, which use near-field communications (NFC) technology, fared especially poorly in 2012. Last year, Gartner predicted that NFC payments would total $38 billion by 2016, but today slashed that prediction by 40% to $22 billion. 

Sandy Shen, research director at Gartner, also cited a lack of value proposition for consumers as being the biggest factor in the slow uptake of NFC for contactless payment.

“Mobile contactless payment doesn’t offer any obvious benefits over cash or card payment,” said Shen. “It must be integrated with other services, e.g. loyalty, offers, rewards and advertising to show value. 

"In addition, the low penetration of NFC phones and contactless reader infrastructure are the technical hurdles to adoption," Shen added.