The Electronic Transactions Association has launched a mobile payments committee, a task force of representatives from companies throughout the complex arena. All four major U.S. wireless carriers—AT&T, Sprint, T-Mobile and Verizon—are on board. Other companies include: Google Inc., which operates Google Wallet; Isis, a joint venture mobile wallet; Wells Fargo; Capital One; American Express; Discover; MasterCard; Visa; PayPal, which offers a mobile wallet; checkout terminal vendor VeriFone; Intuit, a software maker with a mobile payments app; transaction processor First Data; hardware maker Panasonic; and data management and fraud prevention vendor Neustar. All of the companies are members of the association.
Notable by its absence is Square, which offers a mobile payments app for small merchants and consumers and last week signed a deal to process all of Starbucks Corp.’s credit and debit card transactions. Square did not immediately respond to a request for comment.
“Mobile payments represent a game-changing business opportunity for our industry, and ETA’s mission is to help our member companies succeed in this business,” association CEO Jason Oxman says. “Our industry must work collaboratively to ensure that the regulatory and business environment promotes innovation and cooperation. Our mobile payments committee will help ensure that consumers and merchants have access to an efficient, reliable and secure mobile payments system.” ETA is a trade group of providers of payment-processing services to retailers.
The committee is chaired by Jackie Moran, executive director of federal relations for Verizon. “As a nascent industry, the mobile payments market is just beginning to realize its full potential as a robust enabler of global electronic commerce,” Moran says. “The committee is designed to ensure that the early stages of mobile payments are handled in the best possible way: With insight and ingenuity from all the players—private as well as public sector—involved in the future of mobile payments.”
The association says the committee will address several issues facing the future of mobile payments, including business relationships needed to achieve network interoperability among merchants, credit card companies, mobile networks, equipment operators, equipment manufacturers and financial institutions; the education of legislators and regulators developing public policy around mobile payments; and the education of merchants and consumers about the potential of mobile payments to provide an efficient, reliable and secure experience at the point of purchase.
Bringing together the various players and competitors in mobile payments in one room is a good start, says Rick Oglesby, senior analyst at payments consulting firm Aite Group.
“There are a variety of issues they can address that are important to the long-term growth of the industry,” Oglesby says. “For example, network interoperability certainly represents a key area of opportunity. If PayPal customers can’t pay ClearXchange customers who can’t pay POP Money customers who can’t pay Dwolla customers, and so on, then person-to-person mobile payments is going to be severely limited. A forum like this could get members talking to the point of being able to overcome these issues which adds value to all of the players without necessarily compromising their abilities to compete independently.”
Fraud prevention is an area where competitors generally are more willing to share information to make a new service secure, Oglesby adds. “And a cooperative effort in dealing with regulators makes a lot of sense,” he says.
But Oglesby doesn’t think the committee will be where the action’s at.
“Overall, I do think the real progress in mobile will be made by solutions providers developing new, compelling products that add consumer and merchant value, like with the Starbucks and Square deal,” he says. “I don’t expect that competitors will be aggressively sharing their product ideas. However, there is significant value that can be gained by getting the major players talking. It can help.”
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