Sprint’s Vice President of Product Platforms Kevin McGinnis told Bloomberg that the carrier is in talks with payment networks and handset makers to bring contactless payments to market this year. A Sprint spokesman confirmed to LR Mobile that it expects to begin enabling mobile payments by the end of 2011, but it hasn't specified what companies it's talking with to make it happen.
Notably, McGinnis also told Bloomberg that Sprint could share in revenue from sales of coupons sent to its customers’ handsets or targeted advertising, rather than charge its own transaction fee.
Sprint is the only Tier 1 not involved with Isis, a joint venture among AT&T Inc. (NYSE: T), Verizon Wireless , T-Mobile US Inc. , Barclays Capital and Discover, formed to achieve the same goal. The group announced Monday it would pilot the contactless payment tech in Salt Lake City, but not until early to mid-2012.
Why this matters
Sprint launched a Mobile Wallet service last year, earning it a spot in LR Mobile's Top 10 Carrier Apps for its integration between mobile phones and online purchases. At the time, we noted that NFC for physical payments is the next step to making it -- or any mobile wallet service -- more exciting. (See Sprint Picks BilltoMobile.)
Now that interest in NFC has piqued, time to market will be important for any player looking to wrest control of the space, as will an innovative business model. Retailers have long complained about high transaction fees on credit card purchases. [Ed Note. Try asking a cab driver to accept credit, and you'll see what we mean.] Sprint's angle of taking its cut from ads and coupons would appeal to them; however, it could prove challenging to build a business on.
As far as time to market goes, the operators have some control over that, regardless of what player is first to market. As Douglas Kilgour, sales and account management for Isis, noted at last week's Bricks + Mobile conference, handset makers have had the technology to do NFC for years. It's up to the operators to say when the chips will be in phones.
"It's all driven by what the carriers feel they can sell and fits with their portfolio," Kilgour said. "To add NFC is about $10, so 130 million phones times $10 each is some real money. Manufacturers are waiting to flip the switch."
Other companies vying for a piece of the mobile wallet include Google (Nasdaq: GOOG), Amazon.com Inc. (Nasdaq: AMZN), potentially Apple Inc. (Nasdaq: AAPL), credit card companies like Visa USA , and other smaller vendors like mPayy Inc.
Interest in NFC is at an all-time high. Check out the following stories for more moves in the space.
- NFC Needs Bells & Whistles
- NFC Forum Brings In Google & 31 Others
- US Carriers Combine Mobile Wallets
- Mo'bile Money, Mo' Problems
- Positive Progress Predicted for Mobile Payments
- Near-Field Inches Nearer
- Nice Move for NFC
— Sarah Reedy, Senior Reporter, Light Reading Mobile