Cooperation May Be an Elusive Goal in eWallet Sector

Carl Weinschenk
Slide Show

Seven Tips to Protect Your Google Wallet

Even with Google Wallet's built-in identity theft protections, you still need to be wary of hackers.

The issue in the debate is over why Verizon has asked Google to hold off on including its electronic wallet feature in the Samsung Galaxy Nexus phone.

On one hand, Verizon claims that there are solid technical reasons for the move. Folks who follow business suggest that Verizon, which is a partner on the coming ISIS electronic wallet initiative with which Google Wallet - which is well described in the Wall Street Journal post - will compete, suggest that is the reason. The explanation for Verizon's technical concern is described in great detail at Computerworld. The explanation by writer Matt Hamblen makes it appear that the two electronic wallet groups - ISIS and Google Wallet - would have to work together to allow the category to thrive. It almost makes it clear that this is an extraordinarily complex business.

Get ready for a lot of the kind of competitive back and forth we are seeing from Verizon and Google. Even in an age of extremes, the promise of electronic wallets is extraordinary. Essentially, it stands to clip bigger and bigger pieces of the payment card industry, which is worth trillions of dollars. The players are lining up, and the action figures to be fast, furious and a bit vicious.

Right now, there are no standards for ewallets. The fly in the ointment is that industry segments tend to stumble and disappoint expectations if various factions end up fighting each other rather than making the overall category a success. They also tend to have problems if the landscape is characterized by battling proprietary approaches that can't interoperate. The text messaging business didn't take off before consistent standards emerged. One of the biggest issues slowing unified communications adoption has been standards. Technology is inherently confusing. Requiring people to choose sides adds to that confusion and tempts them to throw their hands up and select neither.

The danger is that there is so much money at stake that the two sides will lose sight of the most important thing, which is for the category to succeed and instead get sidetracked by the internecine battle. Even in the best case, it clearly is a confusing field. ZDNet's Rachel King, in a story about MasterCard's partnership with mFoundry, took a more sanguine attitude. She feels that the many models of today can coexist:

Stressing the importance of choice on MasterCard's part represents a budding theme in the mobile payments world that there can be many different, successfully competing forms of digital wallets, whether it be via NFC technology, mobile apps from PayPal or even Starbucks, as well as external modules like those from Square.

The category is moving along. Today, for instance, ISIS said that Gemalto will secure its platform through its Allynis Trusted Service Manager. But the category won't define itself fully until all the players - including, almost certainly, Apple - are in the field.

Add Comment      Leave a comment on this blog post
Dec 13, 2011 11:22 AM Jay Jay  says:

The thing I like the best about Google Wallet is that, unlike many of its competitors, it would allow users to link all of their cards, regardless of brand (Visa, MasterCard, etc.) to their Google Wallet accounts.

From a consumer's point of view, the best mobile wallet would store all of our cards, as well as cash and checks. What we would not want to have is a clutter of apps for each individual card type or even each card issuer. So Google is moving in precisely the right direction and I hope the promised future versions will build on that foundation.


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