AT&T, T-Mobile and Verizon are set to launch an ambitious mobile payments trial next year, aiming to get a jump in a growing market as rival Sprint rolls out its own e-wallet experiment.
The three carriers, as part of the Isis coalition, said the trial will take place in Salt Lake City and will cover both paying for goods at stores as well as using city-wide public transportation. The trial is set to roll out in early-to-mid 2012.
The Isis coalition, formed as a joint venture last year with the goal of using NFC to turn smartphones into e-wallets, is significant for the level of cooperation between three major carriers, which could make its system the first platform-independent e-wallet platform in the U.S.
Other companies are testing out NFC-based services, such as Google’s experiments with NFC in San Francisco and New York later this year, but those could be confined to particular Android handsets.
Not wanting to be left behind, Sprint, too, is set to implement its own NFC system, although the company has not announced particular details of its own trial yet. While Isis plans to take a percentage of each purchase made through the service, Sprint says it may take a share of purchases made with digital coupons available through its service, or through targeted revenue from ads that interact with a consumer’s handset, according to Kevin McGinnis, Sprint’s vice president of product platform, to Bloomberg.
Mobile operators will most likely get in on NFC payments in a big way in the next few years. In February, sixteen global mobile carriers announced intentions to launch e-wallet services in select markets by 2012, according to industry organization GSM Association, which is developing certification and standards to ensure global mobile payments interoperability.
While the rush of activity into what could be a $1.13 trillion global market within three year, according to analysts, should start bringing the technology into the U.S. mainstream, the patchwork of efforts may also create fragmentation and confusion for consumers, especially as merchants rely on special equipment to work with NFC on smartphones and may have to pick and choose between platforms.
A consortium like Isis, however, ups its chances of adoption, especially since aproposed acquisition by AT&T of T-Mobile would make it the largest carrier by far in the U.S., with a potential number-two Verizon as well.
The Isis joint venture did not say what handsets would be part of the trial. Of phones on the market right now, only the Nexus S has built-in near-field communications, or NFC, technology that enables digital payments between devices. But Research in Motion’s BlackBerry phones and some future Android 2.3 phones will have NFC, and the iPhone 5 could have the capability as well.
A further expansion to all of the US is also unknown and may depend on the outcome of the trial.