By many accounts, 2010 was the year Mobile Commerce finally took off. According to ABI Research, Mobile Commerce sales grew 143% in 2010 to $3.4 billion. However, the vast majority of these payments were closed-loop online transactions – with consumers purchasing items from retailers directly on their mobile phone via applications or the mobile web rather than using their mobile phones to pay for goods at retail points-of-sale (POS).
A number of retailers, such as Starbucks with their Starbucks Card Mobile iPhone application, did launch mobile payment solutions on their own in 2010. Generally, these applications consisted of some form of 2D barcode that the consumer pulls up on their phone so it can be manually scanned at the register. In the case of Starbucks, consumers have to first register a physical Starbucks card online and then they can use the mobile application to pay and to add value to their card.
While there is growing consumer interest in mobile payments, the typical requirement to download and install Retailer-specific applications, the lack of a simple and common user experience from one application to another, and the lack of compelling value-add beyond payment has resulted in low adoption to date.
Meanwhile, contactless bank cards saw resurgence in 2010, with Eurosmart recently forecasting that global shipments of contactless bank cards would surpass 22% of the 1 Billion cards issued in 2011.
As evidenced by the many announcements of support at Mobile World Congress in Barcelona last month, the wireless industry is converging on NFC, or near-field communication, as the contactless payment technology of choice for Mobile Payments.
- RIM announced that virtually all of their new devices moving forward would include NFC.
- Google’s Nexus S was the first Android phone supporting NFC and it is widely expected that Apple’s iPhone 5 will support NFC.
- Many of the world’s leading mobile operators jointly announced their commitment to NFC and expect to launch commercial services by 2012.
In November 2010, AT&T Mobility, T-Mobile USA and Verizon Wireless announced the formation of a joint venture chartered with building ISIS, a national mobile commerce network that aims to fundamentally transform how people shop, pay and save. Isis will allow consumers to use their smartphone to make point-of-sale (POS) purchases using Near-Field Communication (NFC) technology.
I recently had the opportunity to interview Jim Stapleton, Chief Sales Officer for Isis, to get an update on Isis' plans. Please visit the Bricks + Mobile 2011 Distillery for an article I subsequently wrote to read more about Isis' plans:
Exclusive Interview: Why the Isis Mobile Wallet Could Replace Your Leather Wallet
It will be interesting to see how the Mobile Payments marketplace shapes up as Isis competes with solutions from Visa and Mastercard, as well as the likes of Apple, Google and many others for the virtual mobile wallet.
For the very latest insights into Mobile Commerce, please join me and an impressive list of other speakers at Bricks + Mobile 2011, a live one day educational event focused on mobile commerce and retail at the Spertus Institute in Chicago on March 30, 2011.
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