Mobile money: The next frontier of app development

Jason Ankenyeditor's corner

The evolution of mobile money services looms large among the dominant themes at last week's Mobile World Congress 2012 event in Barcelona. Consider just a few of the biggest headlines: Isis, the forthcoming nationwide m-commerce network bringing together Verizon Wireless (NYSE:VZ), AT&T (NYSE:T) and T-Mobile USA, announced partnerships with three card services partners--Chase, Capital One and Barclaycard--giving consumers the flexibility to load a range of eligible credit, debit and prepaid cards when mobile wallet trials begin in Salt Lake City and Austin, Texas, later this year. France Telecom-Orange is partnering with financial services giant Visa to introduce new payment functionality to Orange Money customers in Africa and the Middle East. Google (NASDAQ:GOOG) said it plans to expand its Wallet tap-and-pay service to "at least 10 additional [Sprint Nextel (NYSE:S)] phones" this year. And separate from MWC 2012, The Wall Street Journal reports Walmart, Target and about two dozen other retailers have joined forces to take on Isis and Google Wallet with a mobile payment system of their own.

Mobile operators, financial service providers, banks and retailers are carving out their place in the mobile money ecosystem. But what about developers? Their day is coming, according to the industry executives who participated in the MWC keynote panel Mobile Money: Delivering Innovative Mobile Payment Services. "Platforms have a big role to play here," vice president of Google Wallet and Payments Osama Bedier said. "Enabling capabilities in the [Google Wallet] platform is something you'll see from us. There's lot of work we need to do this year. Developers are critical... [Extending Google Wallet support to them] is something we're committed to." 

But when? Bedier didn't say, but it seems safe to assume Google won't roll out Wallet developer tools until it makes significant progress extending the m-commerce network's scope. Beyond Sprint, Bedier said Google remains in talks with other operators, device manufacturers, banks, financial services and point-of-sale technology vendors. Twenty-two of the largest U.S. retail chains now support the Near Field Communications-based Google Wallet, which enables consumers to make purchases by tapping their Android smartphone at 300,000-plus MasterCard PayPass-enabled merchant terminals. Google Wallet also includes support for SingleTap, which allows users to redeem coupons and/or earn rewards points. Bedier said that tens of thousands of transaction terminals supporting Google Wallet are joining the network every month, noting that consumer usage is strongest at convenience stores, followed by fast food restaurants. "We believe the ecosystem has taken off," Bedier said.

That's a matter of debate, however. Despite the multitude of Android smartphones available to U.S. consumers, only a few support Google Wallet: Sprint currently offers Samsung's Nexus S and Galaxy Nexus, and will add the LG Viper later this year. AT&T subscribers with the Galaxy Nexus can now leverage Google Wallet following an Android Market device compatibility update issued earlier this year, but late last year, Verizon Wireless stated it would ship the Galaxy Nexus without preloading Google Wallet. Given that availability across a diverse array of operator networks and handsets is imperative for m-commerce services to achieve critical mass, that gives a decided edge to Isis: Not only are Verizon, AT&T and T-Mobile spearheading the platform, but six device manufacturers--HTC, LG, Motorola Mobility (NYSE:MMI), Research In Motion (NASDAQ:RIMM), Samsung and Sony Ericsson--have already committed to introducing NFC-enabled devices with Isis support.

It's still to early to call whether Google Wallet, Isis or a less heralded competitor will dominate the mobile money market in the U.S. But it's clear that whichever platform wins, developers will play a critical role by bringing to market services that extend far beyond basic retail transactions. "It's all about developers," said Rodger Desai, co-founder and CEO of mobile transaction solutions provider Payfone, during the MWC Mobile Money event. "They will come up with amazing things for how to leverage this capability. It's about giving tools to developers--they'll find amazing problems to solve."--Jason