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