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With Google (NASDAQ:GOOG) Wallet and other mobile payment services coming to the fore, some analysts expect big things for emerging services that let consumers pay for goods using their smartphones or special cards.
ABI Research said Google Wallet and rival services from American Express (NYSE:AXP) and Visa (NYSE:V) have renewed interest in and created optimism for payments enabled via smartphones by near field communications (NFC) wireless technology, which enables devices to talk to each other between distances of a few inches.
How optimistic? ABI is forecasting that 85 percent of point-of-sale terminals that ship worldwide in 2016 will be “contactless-enabled,” or capable of supporting cards or NFC-equipped smartphones that let shoppers pass or tap their smartphones to make purchase.
That’s a big leap from the 10 percent of total POS terminals that shipped with contactless technology. This puts the spotlight on Ingenico, VeriFone, and Hypercom, the three leading vendors of POS terminals.
VeriFone acquired Hypercom after agreeing to sell Hypercom’s U.S. POS terminal business to Gores Group to quell antitrust concerns from the Justice Department.
ABI Senior analyst Craig Foster said contactless technology has the potential to change the way we pay for goods by accelerating check out times. Just as faster Web search leads to more queries performed on search engines from Google and Bing, faster check-out times at retailers lowers a key barrier to consumer purchases.
Unfortunately, there is currently a dearth of NFC-enabled smartphones on the market. Samsung Nexus smartphones are fitted with a special, secure NFC chip, but other NFC-equipped phones have been slow to market.
Fortunately, consumers have a lot of choices should they choose to pay via NFC phones when they become more broadly available.
Google Wallet lets shoppers purchase goods from select retailers from NFC-enabled Samsung Nexus S 4G smartphones from Sprint. The service, which represents the first major tap-and-pay service in the U.S., is launching later this month in New York City and San Francisco.
PayPal plans to enable users to tap two Nexus S phones together to let users exchange money, a solution the company promised will be released later this summer.
American Express’ Serve is a digital payment platform that blends online, offline and mobile payment options into a single account, funded from a bank account, debit, credit or charge card, or by receiving money from another Serve account. Serve will be integrated on mobile phones and tablets from Verizon Wireless.
Visa just unveiled a plan to coax retailers to install technology in their POS terminals that processes a card embedded with a computer chip. Consumers will complete transactions with a signature or PIN at the point of sale.
Then there is Isis, the mobile payment platform from carriers AT&T, Verizon and T-Mobile. Isis is the first mobile payment provider to ink all four major credit card providers for support in the U.S. Isis will test its payment system in Salt Lake City, Utah and Austin, Texas, in the first half of 2012.
There is a lot at stake in mobile payments. Gartner said worldwide mobile payment users will surpass 141.1 million in 2011, with mobile payment volume expected to top $86.1 billion around the globe.
And retailers will need contactless POS terminals to process these transactions.