eWEEK content and product recommendations are editorially independent. We may make money when you click on links to our partners. Learn More.
The Electronic Transactions Association has formed a Mobile Payments Committee that may provide the mobile payments market with the boost it has been waiting for. Verizon Wireless, AT&T, Sprint, T-Mobile, Google, Capital One, American Express, Discover, MasterCard, Visa and PayPal are among the committee’s participating members.
“Mobile payments represent a game-changing business opportunity for our industry, and ET’s mission is to help our member companies succeed in this business,” ETA CEO Jason Oxman said in an Aug. 9 statement announcing the committee’s formation.
Gartner has forecast that mobile transaction values will exceed $171.5 billion this year, up nearly 62 percent from 2011, and grow to $617 billion by 2016, with more than 448 million device users participating.
From within the industry, there’s been no lack of interest. Google’s Wallet app is slowly rolling out to more devices, can be used at the locations of more than 25 national retailers and now can be linked to more credit cards-though its relationship with American Express remains a bit dubious.
PayPal offers a browser-based mobile payment solution, while Intuit allows smartphone owners to receive mobile credit payments on their phones.
In July 2011, American Express and Sprint announced a mobile payments deal, and a month later, Verizon, AT&T and T-Mobile said they were putting $100 million into Isis, a mobile payment solution that, like Wallet, relies on near-field communication (NFC) technology. Capital One, JPMorgan Chase and Barclays are also tied to Isis, which is just beginning to pilot the solution in test cities that include Austin, Texas, and Salt Lake City. On July 31, Isis announced that it had penned an agreement to offer a tap-and-go solution at the gas pumps of a small handful of companies.
Consumers, however, have been a bit more tentative.
However, Ken Hyers, a senior analyst with Technology Business Research, points out that Starbucks currently processes 1 million mobile payments per week. Young adults in certain segments are very comfortable making mobile payments, “though I don’t see many consumers yet feeling comfortable with buying a large-ticket item at a big-box retailer using their phone rather than a credit card,” Hyers told eWEEK.
“But, give it a few years,” Hyers added. “Barring a major problem such as mass identify thefts facilitated by a gap in the mobile payment infrastructure, using a smartphone to buy a TV will become as common as using a debit card for the same transaction is today.”
With its new committee, the ETA has said it plans to foster the necessary business relationships between the various parties involved: merchants, mobile operators, equipment operators, equipment manufacturers and financial institutions.
The ETA also plans to explore “best practices” for the industry, it said in a statement, as well as to educate merchants and consumers about the “potential” of mobile payments and to frequently update policy makers on relevant proposals and solutions.
The committee is unusual in that its members include parties that tend to be, if not competing, closely policing one another.
“I suspect there’s a lot of suspicion that the mobile payment industry faces as it seeks support for new regulations that will ease the mobile payment process. The financial industry in general is not very popular with the public these days, so any part of the industry that asks for modification or relaxation of regulations is going to face an uphill battle,” said Hyers.
But first, they all needed to get together.
“Standardization is what is needed to get a system like this off the ground,” said analyst Roger Kay, with Endpoint Technologies, pointing out that there are still “important players missing,” namely Apple and Microsoft.
“Of course,” Kay added, “everyone wants a slice of each transaction, but they have to be careful not to overburden this new payments method. Otherwise, its growth will be considerably slowed.”
Follow Michelle Maisto on Twitter.