The long slog toward the establishment of a robust mobile wallet sector took a big (and sloggy?) step forward last week with the nationwide launch, after three years, of Isis.
The company, which initially was backed by Verizon Wireless, AT&T and T-Mobile, went through significant changes.
On the technical side, it has been a problematic champion of the emergence of near-field communications (NFC). At the start, proponents of NFC relied heavily on mobile wallets as a vehicle for their success. The miscalculation was that the non-NFC challenges to mobile wallets, which moved closer to its cousin Bluetooth through a joint arrangement between the NFC Forum and the Bluetooth SIG announced last week, were huge and time-consuming. This stalled the growth of the communications protocol. Caroline Gabriel at Rethink Wireless has more on the mobile wallet/NFC relationship.
Mobile wallets are on the move. Isis, according to eWeek, can be accessed by more than 40 smartphones. The story has a list, and a description of the service:
The app works like this: Download it, plug in credit card or banking information and then visit the issuer's Website to complete the process. When it's time to pay for something, select the card to be charged (several or one can be plugged into the app), tap a phone to the contactless point-of-sale module on point-of-sale machines (where you swipe your credit card), and the charge is made.
The relationship between mobile wallets and NFC is changing, and not necessarily in favor of NFC. In response to my emailed questions, David Eads, the founder and CEO of Mobile Strategy Partners, indicated that clouds may be on the horizon for NFC:
Mobile wallets are moving towards cloud-based models rather than carrier-led hardware-based models like Isis, which were really conceived in the days of the feature phone…In fact, many execs in payments are even considering whether NFC is even a relevant technology for wallets. Bluetooth's addition to iOS certainly is intriguing as an alternative.
The launch of Isis is the big recent headline in mobile wallets—but it is not the only news. Earlier this month, Rogers said it is on the verge of introducing Suretap Wallet, which will work on some Android and BlackBerry devices. It will provide the ability to give gift cards, reload prepaid cards, check account balances and perform other tasks, according to NFC World. The story said that the initiative is separate from the Suretap payment service launched with CIBC a year ago.
The Globe and Mail also offers a broader look at the situation in Canada. It seems likely to be fun:
Collectively the Canadian players have already spent tens of millions of dollars on burgeoning technology for the mobile wallet, an application that allows consumers to pay for items by swiping their smartphones instead of plastic credit or debit cards. Powerhouses such as Canadian Imperial Bank of Commerce, Royal Bank of Canada, BCE Inc. and Rogers Communications have already staked their territory, but the roster is quickly growing, including new entrants such as tech titans Apple Inc. and Google Inc. The bigger the ecosystem becomes, the harder it will be to make one specific app standout.
The story notes that all of the approaches use NFC except those associated with Apple, which has resisted the technology. Instead, the company’s devices use a proprietary approach called iBeacon.
The mobile wallet idea is not limited to North America. Last week, the Global Times reported that Alibaba Group Holding Ltd.’s Alipay claims that its initiative has almost reached 100 million users across the vast nation. The story outlined usage, though it did not say whether it is an NFC-based service:
According to Alipay, about one-third of transactions are from mobile phones, eight times that of the same period last year. On Singles' Day this year, the transactions done via mobile phone reached 45.18 million, with a value of more than 11.3 billion yuan ($1.85 billion).
It seems, finally, that the electronic wallet sector is primed to make big gains. That’s good news for those in the sector and, perhaps, for NFC vendors—if it is not too late.