By Matthew Talbot,
Senior Vice President for mCommerce at Sybase 365
Google officially launched Google Wallet, “the app that makes your phone your wallet,” at the end of September (for customers of US telecom operator, Sprint, with a Nexus S 4G phone). Hot on its heels was the announcement from Isis, AT&T, T-Mobile and Verizon consortium, that a number of handset-makers (HTC, LG, Motorola, RIM, Samsung and Sony Ericsson) have committed to make near field communications (NFC) enabled devices that use the Isis standard and so will Device Fidelity, maker of microSD cards that bring NFC functionality to devices that do not have it.
Let the games begin
This bout of activity was the beginning of the games that are set to continue around NFC. But how do the banks and merchants fit into the NFC picture?
Currently Citibank is the only bank participating in Google Wallet, although Visa, Discover and American Express have made plans to be added to future versions of Google Wallet.
It seems the only reason they have joined up is that they think they have to be there. They want to be a part of the experiment. They want to be seen as forward thinking. At the same time, they are working on their own initiatives. They are participating in Google Wallet. They will participate in Isis, but they are also hedging their bets with their own strategies.
Around the world, banks have been behind the majority of pilot programs for proximity payments like NFC. Very few have actually launched full-fledged services with NFC, because what is in it for merchants and consumers is still questionable, and the distribution of the transaction revenue is still a challenge as there are more “mouths” at the table.
The impression being given is that the banks are joining the NFC game because they believe they have to be there. They want to be a part of the experiment. To be seen as forward thinking while simultaneously working on their own initiative. They are currently participating in Google Wallet. They will participate in Isis and anything else that comes along, but they are also hedging their bets with their own strategies.
Obviously with Google’s involvement around CRM opportunities, looping in discount offers, coupons, barcodes, location and loyalty etc, it does make NFC more interesting. However, there are still some hurdles to overcome, apart from just the handsets and readers.
The jury is still out on what will be successful about these early NFC services and who will succeed, but it is unlikely that we will see the banks rushing to roll out these services, or merchants standing in line to sign up for them anytime soon.