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    Google, Apple to Challenge Carriers With Mobile Wallets: ABI

    By
    Clint Boulton
    -
    November 27, 2011
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      Mobile wallet services from Google (NASDAQ:GOOG) and Apple (NASDAQ:AAPL) will claim market share from similar services from carriers such as Verizon Wireless, AT&T and Vodafone, according to ABI Research.

      Mobile wallets include payment systems that consumers use to pay for goods with smartphones. Mobile wallets, many of which use near-field communications (NFC) technology, are all in early stages. Isis, the mobile payment venture AT&T, Verizon and T-Mobile are spending millions of dollars to build, won’t launch until 2012.

      However, ABI said NFC-based mobile wallet users will grow to 594 million by 2016. Carriers and OS creators such as Google, Apple, Microsoft (NASDAQ:MSFT) and Research In Motion will flood the market with NFC-capable mobile phones in the United States, Western Europe, Japan and Korea. Moreover, merchant offers spurred by local daily deals will provide consumers with added incentive to use mobile wallet services.

      ABI Research analyst Mark Beccue said carriers will provide 75 percent of the NFC-based mobile wallets in 2012, only to have Google and Apple whittle carriers’ market share down to 63 percent in 2016, thanks to their strong brands and the ties they’ve created with consumers.

      Google Wallet lets consumers in San Francisco and New York City pay for goods at retailers such as Macy’s and Toys R Us by tapping phones against check-out terminals that support NFC.

      While users currently can only access Google Wallet via Sprint’s Samsung Nexus S smartphones, Beccue said Google Wallet will see adoption on more smartphones and by more retailers by the end of 2012.

      The service, for which Google is providing added incentive with its Google Offers daily deals service, will succeed in markets where carriers prefer not to spend capital to develop and support mobile wallet infrastructure.

      By 2014, Google Wallet will be supported alongside mobile wallet services from carriers with whom Google currently partners to sell Android phones. Carriers will take a cut from the joint ventures, Beccue added.

      Apple has yet to launch a mobile payment service, though it is widely believed from patents and whispers in the corners of the industry that the company will equip its iPhones with payment-enabling NFC sensors and software in 2012.

      As with Google and its carrier partners, AT&T and Verizon will allow Apple to offer its mobile wallet to consumers who have iPhones, regardless of whether or not the carrier has a competing mobile wallet, Beccue noted.

      Interestingly, ABI believes over-the-top (OTT) mobile wallet providers, such as those from banks, payment providers and merchants, will have a hard time gaining traction versus carriers, Google, Apple and others.

      This is because carriers will blend OS wallets from Google and Apple into their own wallet services, winnowing down the growth of independent mobile wallets.

      Clint Boulton

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