According to Bloomberg, the carriers may invest hundreds of millions of dollars in the NFC solution to battle Google Wallet. Mobile payments may be a $670 billion industry by 2015, making the early moves by all the players extremely important.
First Step: NFC ChipsNFC chips are beginning to become ubiquitous in new smartphones and it is a matter of time before consumer behavior starts to change when it comes to day-to-day payment options. NFC payments is currently on top of Gartner's "Hype Circle" which means that it is between two and five years from maturing into commercially viable technology. Given the pace of mobile innovation and the vigor of the carriers (as seen with this new large investment in Isis), it is probably best to bet on the short end of that development cycle.
There are other large companies with a vested interest in how NFC is developed. Google and the carriers are the primary drivers but the credit card companies also have a major stake. Visa, which has invested in mobile card reader Square, is investing in NFC terminals for merchants outside of what the other players are doing, according to Bloomberg.
Sprint & Google Need to Come to The Herd
Sprint is on the outside of the Isis co-operative. Hence, when Google announced its NFC plans in May, Sprint was the carrier of choice for the Wallet project. Sprint plans on rolling out its NFC and the Google payments option to its smartphones later this year, rolling out ahead of ISIS, which plans on releasing its NFC option in mid-2012.
Google Wallet and Isis are probably the future of the daily deals industry as well. Sprint, Isis and Google (through its Offers program) plan on using mobile wallets to push coupons to consumers while taking a cut of the sales.
Isis probably has the upper hand over Google and Sprint. It has the cooperation of all the major payment operators and a large existing customer infrastructure. Google's partners include Sprint, CitiBank and MasterCard. Those are important players, but Google and Sprint should consider joining Isis for the good of the ecosystem, which is in danger of becoming extremely fragmented.
One Reader to Rule Them All
What it will all come down to is the ubiquity and simplicity of NFC card readers. If a player (like Visa or one of the large financial management companies) creates a NFC reader that will be carrier, device and service agnostic, then all players can survive and compete together. Yet, most merchants will not put in multiple payment readers.
Therefore, for NFC to truly take off as a payment option, a compromise will need to be reached. That is not outside the realm of possibility as Verizon, AT&T and T-Mobile show us with their investment in Isis.