So we are nearing the end of 2012 and I am still waiting to see real movement amongst the operator community that was making noises all last year about NFC payments and mobile wallets taking off. Not only that, but they have largely blocked anyone else from going it alone too.
Yes , there are some mitigating circumstances, the EU monopolies investigation into Project Oscar in theUK was a big factor, but even then there could have been seeding of handsets and SIMs and other progression.Google Wallet went 2.0 and is certainly an improvement, having much wider support and engagement from the banks and card issuers. Is this the only reason it hasn't gone bigger? And the reason that no other NFCpayment providershave been able to enter the market?
To me the MNO positionstrikes meas oneof an industry that is worried. To date, MNOs have held back from rolling out NFC and seeing what happens. They are worried that to do so will open up the market for other players. Maybe it wouldbut as it stands the delays andprocrastinationis putting off partners and allowing a different form of competition to enter the market. Such protectionism hasn't worked in the past (walled gardens anyone?) and I see no reason why this occassion will be any different.
Operatorspotential partnersandB2B clients do not want to tie themselves into a business model and pricing strategy that is not entirely fair and equal. Some flexibility and lateral movement is needed to stimulate their interest and attract customers. If anything, retailers want to get away from the 4-party model and interchange fee system that they find expensive and less justifiable. What can they do to appeal to them? No-one has shown the retailers that NFC will produce returns for them. No-one (with the exception ofone or two players)has developed platforms offering VAS that will appeal to retailers. This seems like a role that MNOs could fill.
In the meantime alternative means of mobile payments are creeping in and some majorretailers are launching their own payments combined with their loyalty programs. Amazon and PayPal are increasing their presence instores and McDonalds has followed the lead taken by Starbucks. These companies have the scale todo so and have identified the potential of mobile.
It is a shame that the MNOs do not have the same level of confidence because if they continue to dither then they will miss out on a lucrative new revenue stream. The OTT players move much faster and focus on building scale before monitising their services. The MNOs have left the door ajar and these companies will slam it open if things continue to remain in limbo. The next 6-9 months will be critical in how this market develops.