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Mobile payments to make slow progress in 2012

Mikael Ricknäs | Dec. 28, 2011
Operator partnerships and small-scale mobile payment trials will start to bear fruit in 2012 and some analysts think Apple will make a play for our wallets. But mass-market acceptance will still allude the sector, according to analysts.

But the competition with Google isn't all bad. That different large companies enter the space helps show that it is a legitimate market, according to Jaymee Johnson, head of marketing at Isis.

By the middle of 2012, Isis will launch services in Salt Lake City and Austin, Texas, and then build from there.

In those two cities, consumers will be able to walk into a carrier retail store and choose between multiple smartphones, load their choice of mobile payment card onto the phone, and then use the mobile payment system at both national chains and local stores, according to Johnson. Eventually, Isis will have nationwide coverage, but real scale won't come until 2013 and 2014, he said.

The number of phones that ship with NFC will grow from an estimated 34 million this year to 80 million next year, which doesn't equate to mass-market acceptance. But by 2016, that number will have grown to 552 million, according to ABI.

NFC successes will at first be found outside payment systems and payment efforts will not achieve much success before 2015, according to CCS Insight.

Even if NFC continues to get a lot of attention, it isn't the only technology that will be used to enable mobile payments. For example, PayPal earlier this year announced plans to start using barcodes in 2012.

As always, one of the big questions for 2012 is what Apple will do, and if the company still has the power to change the telecom sector in the post-Jobs era. Some analysts are convinced that Apple will launch a service and grab market share from the operators.

"Apple will launch a mobile wallet product in 2012. Apple's operator partners will allow Apple to offer their mobile wallet to consumers who have iPhones, regardless of whether or not the operator has a competing mobile wallet," said Mark Beccue, senior analyst at ABI.

CCS Insight also expects that Apple will integrate NFC into the iPhone 5, and link it to its iTunes payment infrastructure.



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