One factor behind relatively slow uptake of mobile payments in developed economies has been fragmentation. In the US, there were signs that situation could improve, with the formation of a new cooperation initiative ‘ swiftly followed by another step towards a fragmented ecosystem, this time a group formed by retailers.
On the side of harmony is the payment industry’s trade body, the Electronic Transactions Association, has formed a mobile payments committee, according to VentureBeat, which brings most of the main US movers and shakers together round one table. The carrier joint venture Isis ‘ Verizon, AT&T and T-Mobile ‘ will be included, along with Google, Sprint, PayPal, Verifone and Intuit.
The committee is not setting standards directly but will aim to influence legislators and regulators on mobile payment policy, raise awareness among consumers and retailers, and address the crucial issue of the value chain ‘ and how the business relationships work between the various links.
The committee also says it will look at the big challenge of interoperability between systems like Google Wallet, Isis and PayPal’s mobile platforms. Success here, or even a credible roadmap, could boost retailer confidence and avoid problems like Verizon introducing the Galaxy Nexus smartphone ‘ the first with Google Wallet ‘ but disabling the wallet, presumably because of was backing Isis as an alternative.
Success is not assured ‘ industry committees have a poor track record of actually delivering commercial results, and key start-ups like Square ‘ fresh from an important new partnership with Starbucks – are not yet involved. However, the ETA does have real influence, with 500 members covering every aspect of financial services.
“There are a lot of different pathways to enable consumers to use mobile payments,” ETA CEO Jason Oxman told VentureBeat. “The idea behind the committee is to get all the players around the table, ask everyone to take off their company hats and put on their industry hats and talk about what issues need to be resolved.” Verizon Wireless’s executive director of federal relations, Jackie Moran, will chair the new group.
But no sooner did some harmony appear to be breaking out, than a group of retailers was setting itself up in opposition to Google or the Isis carrier-driven alliance.
More than a dozen retailers, including Best Buy, Walmart, Target and 7-Eleven have formed the Merchant Customer Exchange (MCX), an m-payments network. The partners claim they are better placed than other players in the value chain, such as cellcos or web firms, to create a system which really caters to the needs of merchants and attracts their support. Lukewarm interest from stores has been one reason for the slower-than-expected progress of the NFC contactless payments technology.
No launch date was given for MCX, but development of its mobile application is underway and will support any smartphone. Like Isis and others, the aim is to combine a mobile wallet with various targeted offers and promotions, linked to location and customer shopping history. The organization has not yet said whether it will use NFC or an alternative technology. Some major payments players, such as PayPal, have been cool towards NFC so far and investigated web alternatives.
Meanwhile, Apple remains lurking on the sidelines. Windsor Holden, research director at Juniper Research, told IDG News: “There is no question that Apple will come out with some form of contactless payment technology’, though it may not necessarily be NFC ‘ Apple has hinted at using a Bluetooth variant.