Device operating systems

Google, Apple Fight Carriers for Mobile Money

The potentially lucrative market for mobile payments has everyone seeing dollar signs, and is once again pitting wireless operators against Google (Nasdaq: GOOG) and Apple Inc. (Nasdaq: AAPL).

Apple today appointed Benjamin Vigier, formerly of mCommerce vendor mFoundry Inc. , to the role of product manager for mobile commerce, presumably to evangelize the market for near-field communications (NFC), an RFID tech that enables data exchange with the swipe of a phone. Essentially, the addition of an NFC chip can turn any phone into a credit card when it's scanned in close proximity to an NFC reader.

Vigier has been tinkering with NFC since 2004 with previous roles at French mobile network operator Bouygues Telecom and SanDisk Corp. (Nasdaq: SNDK). While at mFoundry, he ran a PayPal Mobile service and a Starbucks' bar-code-based mobile payments service. He also developed mobile wallet apps for two US mobile operators and NFC apps for a US bank, reports NFC World.

Apple's not talking about what exactly it plans to do with NFC, but the plethora of patents it already holds suggests mobile payments transacted over iTunes, mobile marketing campaigns, and an airline ticketing service are among the near-term targets.

NFC requires new point-of-sale readers and handsets with chipsets -- still expensive today -- that support them. Broadcom Corp. (Nasdaq: BRCM) acquired an NFC vendor in June, presumably to help drive down the price, and Qualcomm Inc. (Nasdaq: QCOM), too, supports the short-range tech in its multi-mode chips. (See Broadcom to Buy NFC Chipmaker and Qualcomm Adds Support to Chipsets.)

The next step will be for Apple –- and other handset makers –- to build new phones equipped with these NFC-capable chipsets, keeping the mCommerce revolution at bay for at least a few months longer. (See Near-Field Inches Nearer, Nice Move for NFC, and Scanbuy's New CEO Talks Mobile Bar Codes.)

PayPal looks toward Android
As the hardware comes up to speed, mobile money is making strides at the software level as well. Established transaction vendor PayPal, owned by eBay Inc. (Nasdaq: EBAY), is firing back against wireless operator plans to dominate mobile payments by teaming up with Google.

PayPal already has mobile apps on the iPhone and Android, but is looking to take the micropayment integration further, according to a Bloomberg report.

The partnership would let Android phone users pay for apps using PayPal instead of credit cards or Google Checkout. PayPal is already a force to be reckoned with, boasting 87 million active accounts. Adding PayPal to Android would also help out the developers, who cite the operating system's lack of integrated payments as a chief complaint.

Light Reading spoke to PayPal's general manager Eric DuPrat about the vendor's mobile apps at CTIA in March. Here's the video:

Wireless operators muscle in
Helping move the mCommerce market forward, but also making it much more complex, is the fact that the wireless operators are showing keen interest as well.

Earlier this month, AT&T Inc. (NYSE: T), Verizon Wireless , and T-Mobile US Inc. reportedly formed a joint venture with Discover Financial Services and Barclays Bank to trial mobile contactless payments in Texas, Utah, and Minnesota. (See Mo'bile Money, Mo' Problems and Operators Cash In on Mobile Payments .)

Juniper Research Ltd. analyst Howard Wilcox says that it's still too early to say which sector of the market will dominate mobile payments, but the attention given to the space is good news for all. "mCommerce is going to grow big time over the next five years, so the opportunity is there to be grasped," he says.

Juniper Research predicts that global NFC transactions will reach almost $630 billion by 2014, up from $170 billion this year, representing the gross value of all purchases or the value of money being transferred.

— Sarah Reedy, Senior Reporter, Light Reading Mobile

sarahthomas1011 12/5/2012 | 4:26:39 PM
re: Google, Apple Fight Carriers for Mobile Money

GigaOm makes a good point about Apple bringing NFC to the masses and also an apt comparision between Nokia and Apple. Nokia also had two-way video chat with fring before Apple had FaceTime, but FaceTime got all the buzz. Same could happen with NFC, which Nokia has been pursuing long before Apple as well.

Here's the post: http://gigaom.com/2010/08/16/apple-could-finally-bring-nfc-to-the-masses/

sarahthomas1011 12/5/2012 | 4:26:39 PM
re: Google, Apple Fight Carriers for Mobile Money

Who would you rather have manage your transactions (or would you do it on mobile at all)? I'd prefer the mobile operators, since the bill would all be in one place, although it may be a massive bill.

The retailers will likely prefer whomever takes the smallest cut in the transaction fee.

mgardner750 12/5/2012 | 4:26:38 PM
re: Google, Apple Fight Carriers for Mobile Money

Niether. I would prefer Visa or MC.

I don't see having a chip in the phone makes either Apple or a Carrier a better providor of payment services than V or MC.

With a CC processor, you have liability protections in place as well as active fraud departments. Those type of skills is not what Apple or the Carriers excel at.

sarahthomas1011 12/5/2012 | 4:26:38 PM
re: Google, Apple Fight Carriers for Mobile Money

That makes sense given that consumers are already comfortable with them too. How do you feel about Discover, the carriers' partners? Seems like partnerships are the way to go for the credit card companies (and other players), so they don't get cut out of the equation.

joset01 12/5/2012 | 4:26:36 PM
re: Google, Apple Fight Carriers for Mobile Money

Over-the-air payments is obviously useful, even cool, but if I get it on a phone, I want a number I can call -- or a specific email address I can write -- to disable the phone if its stolen. Too risky otherwise....

jwmarc123 12/5/2012 | 4:26:26 PM
re: Google, Apple Fight Carriers for Mobile Money

Did Lightreading look into the BART trial using Sprint/Vivotech/Firstdata/and Wells Fargo? You could use your cell phone to go through the turnstiles and pay your fare using your mobile phone via NFC...

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