Enterprise Mobility: Google NFC Mobile Payments May Face Apple, Amazon, PayPal as Challengers
NFC Challenged by Lack of Standard
For starters, there is no cohesive, universal NFC standard. The NFC Forum, which Google joined in March, is working on one. Until a standard is hashed out, wholesale NFC adoption could remain crippled.
Apple is reportedly building NFC for a future iPhone, which could blow open the market for NFC because the company has sold more than 100 million iPhones. This presents a Catch-22 challenge. Until Apple releases an NFC-enabled iPhone, consumer awareness is likely to be low. Apple through its ubiquitous brand tends to call attention to new products. But when Apple does launch an NFC phone and hawks it as a mobile "iWallet," carriers will find it tough to sell Android phones that do the same. Just look at what happened to the Motorola Xoom, launching so close to the iPad 2.
Windows Phone 7 devices have nowhere to go but up. If Microsoft can, as rumored, deliver NFC-capable handsets, it will put pressure on Android phones and Google's plans for them.
Seeing as how Nokia is now Microsoft's preferred Windows Phone hardware partner, and that Nokia has pledged to pump out NFC phones throughout 2011, it's best not to discount the world's reigning smartphone leadereven if its market share is sputtering.
RIM's smartphone fortunes are fading in the United States. The company will need to match or exceed what its competition is doing, so expect it to launch NFC-enabled Blackberries later this year. Word about these devices may come at Blackberry World in May. An NFC Blackberry would look mighty attractive to the corporate road warrior tired of whipping out his wallet for every coffee, newspaper or rental car.
PayPal, which reported only 5 million active mobile users and $750 million in mobile transactions through 2010, expects to do $2 billion in transactions from its mobile products this year. Forrester analyst Thomas Husson said in a new report on mobile payments that most of these revenues are derived from eBay's online platform, but moving forward, we should see more and more merchants embracing the solution and generating incremental sales. Of course, PayPal doesn't have a smartphone platform or handsets to offer, but if it can convert its desktop users to mobile users, it could create a mobile-payment platform used by 100 million people. That's a lot of people that won't use a Google mobile-payment service.
Like PayPal, Amazon.com doesn't have a smartphone in the game, but thanks to the Kindle, it does know a thing or two about pairing a hardware device with a massive e-commerce user base. Moreover, the bookseller turned seller of everything is already making a play for Google's Android Market sales with its Amazon Appstore for Android. An NFC plan would seem to be par for the course in endearing itself further to consumers in the burgeoning mobile-commerce market. In fact, the company's Amazon Wireless group already sells smartphones.
Verizon, T-Mobile and AT&T forged Isis, a mobile-payment venture that will use Discover Financial Services' network to process payments. This is awkward, as Google would stand to compete with the very carriers that carry Android phonesunless, of course, Google joins Isis as a partner. That would make sense to somewhat streamline the many competing NFC factions, though there is no evidence yet that will happen.
Square enables any business to accept credit and debit cards. It pairs the card reader adapter you see here with an Android or iPhone application to allow people to pay by credit card with their phone. This is yet another way users can pay on the go from their smartphones, providing more competition for Google to contend with.
You know that Field of Dreams quote, "If you build it, they will come?" Thats not so assured for mobile payments. Google needs to have enough people using not only Android smartphones, but those equipped with NFC capabilities, and it needs to market those perks beyond offering local poster scanning in Portland, Ore. Assuming it works out, 340 million global mobile users will use mobile payments, with such transactions totaling $245 billion by 2014, according to Gartner.
Google has a checkered history in e-commerce. The company tried to push the Nexus One in its own Webstore and that didn't work. Google also tried to make Google Checkout a significant platform, but that hasn't been widely adopted by merchants. So the biggest hurdle Google may have in getting the mobile market and consumers to adopt its NFC mobile platform may be its reputation and credibility.