The US Mobile Wallet – Can’t Wait to Install It?

(Apr 2 2012) 4G , LTE , Mobile Money , NFC , Smartphones

1. In the context of mobile payments, the rollout of Google Wallet might easily be viewed as being as critical to the industry as Google itself has been to the Internet search engine. But not unlike the Internet search engine, there’s not just one name in the game and with a competitive marketplace emerging even before widespread user adoption, it will be an interesting if not exciting game to watch.

   A joint venture between AT&T, Verizon Wireless, and T-Mobile, Isis is currently Google Wallet’s only visible mobile wallet competitor. Although it has been around since 2010, Isis has until recently maintained a relatively low profile compared to Google which announced its plans almost a year afterward.

   “Mobile commerce is more than a new way to pay; it’s about extending the relationships consumers enjoy with their banks and merchants into a powerful and convenient new form factor,” explained Michael Abbott, CEO, in an Isis press release. In terms of extending the relationships Abbott references, for a contender hoping to achieve any sort of success in mobile payment deployments there are three critical objectives – or obstacles, depending on how you see it.

   In the context of mobile payments, the rollout of Google Wallet might easily be viewed as being as critical to the industry as Google itself has been to the Internet search engine. But not unlike the Internet search engine, there’s not just one name in the game and with a competitive marketplace emerging even before widespread user adoption, it will be an interesting if not exciting game to watch.

   Isis, a joint venture between AT&T, Verizon Wireless, and T-Mobile, is Google Wallet’s only currently visible mobile wallet competitor. By comparison, while it has been around since 2010, Isishas, until recently, maintained a relatively low profile compared to Google which announced its plans almost a year afterward.

   “Mobile commerce is more than a new way to pay; it’s about extending the relationships consumers enjoy with their banks and merchants into a powerful and convenient new form factor,” explained Michael Abbott, CEO, in an Isis press release. In terms of extending the relationships Abbott references, for a contender hoping to achieve any sort of success in mobile payment deployments there are three critical objectives – or obstacles, depending on how you see it.

   They include:

   • Putting the technology into the hands of consumers
   • Ensuring acceptance of the technology by the financial industry
   • Acceptance by merchants and points of purchase

   As for putting technology into the hands of consumers, Sprint and Google recently announced the rollout of Google Wallet to all Nexus S 4G smartphones and customers. Osama Bedier, Google's VP of Google Wallet, explained to an audience at Mobile World Congress that Sprint is offering Google Wallet on the LG Viper and an additional 10 NFC-enabled Sprint will be added to the operator’s line-up. The application is currently supported only on Android-powered smartphones. To further expand the number of supported devices, Google is going to make available an NFC “sticker” that can be affixed to a user’s phone that will enable it to support a somewhat limited subset of the Google Wallet.

   Isis, meanwhile, has been busy addressing the matter of the financial industry and the JV recently announced that US card-issuing banks J.P. Morgan Chase, Capital One Financial and Barclays PLC have signed on to offer their client mobile payment services this year. The banks are among the largest issuers of credit and payment cards offering products from, Visa, MasterCard, American Express and Discover. Trials of the Isis service will commence this summer in Salt Lake City and Austin, Texas.

   Both Google and Isis have each managed to each successfully clear one hurdle but there’s still much ground to cover in this race. While Google Wallet is available now, its current deployment supports only some Citigroup-issued Mastercard products and Google’s own pre-paid cards. By contrast, Isis currently lacks an active supporting network operator and available device, although it is working with DeviceFidelity Inc. which will provide add-on NFC capability for smartphones on a microSD form factor. Smartphone manufacturers HTC, LG, Motorola Mobility, RIM, Samsung and Sony have also been identified as being committed to the delivery NFC-enabled smartphones.

   Until both Google and Isis get closer to broadening their offering to consumers, acceptance by merchants may be similar to “pushing rope” for the interim. Payment systems providers, VeriFone, Ingenico, ViVOtech and Equinox Payments have all been announced as Isis partners and are representative of the largest providers of retail merchant terminals. The cost associated with terminal upgrades needs to be considered as well.

   And that might be a good reason to remember look inside of the consumer’s wallet. Aside from the usual credit and debit cards are likely to be found a host of loyalty and gift cards. These cards run the gamut of form factors, including 1D and 2D bar codes as well as magstripes. By aggregating and simplifying the functionality of these through NFC and a mobile wallet, the value proposition to the merchant and consumer becomes more compelling.

   Google’s recent announcement that it has acquired TxVia is an indicator that it sees the value in getting further inside the consumer’s wallet. In his blog, referring to the acquisition, Bedier completes the picture, explaining that Google has “been hard at work developing Google Wallet, a payment service that makes it possible for people to redeem discounts, earn loyalty points and pay - all at the same time.” As payment technologies and platform operator TxVia has well-established relationships with all major payment networks and currently manages around 100 million accounts associated with products such as prepaid, reloadable, gift and loyalty cards.

   At 4G World 2012, thought leaders and experts will open the mobile wallet for discussion and debate. Delegates will examine underlying technologies and review progress of trials and deployments of mobile payment solutions.

   By Andy Mitchell, Editor, 4G Trends

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