Mobile Wallet: Coming Soon?

Where's the much-promised mobile wallet in America? It seems to be always two years away. But signs are finally pointing to real progress, says mobile consultant Soumen Ganguly.

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Fri, October 01, 2010

CIO — For years, the dream of a U.S. mobile wallet was "just around the corner" only to be pushed back further down the road. Then came the iPhone, and the mobile wallet took form. Surely, the iPhone and its massive App Store would bring the mobile wallet to life.

It seemed like the thinly shaped iPhone with the colorful touchscreen could handle, well, just about everything. You could pay bills, transfer funds, shop on Amazon, redeem digital coupons, even scan an image of a Safeway membership discount card. Indeed, the iPhone has helped create a boon in mobile commerce.

[ The American Red Cross raised $7 million in two days after the devastating Haiti earthquake thanks to donations made with text messaging. Was this a turning point in mobile commerce? ]

Americans began to wonder when they could throw their thick leather wallets bursting with paper and plastic, a la George Costanza's famous exploding wallet, into the proverbial trash can. But nearly four years since the debut of the iPhone, the mobile wallet has yet to come to fruition.

There is no iPhone app today that delivers the ubiquity of cash.

Once again, the specter of hope for a mobile wallet has risen. Last month, Bloomberg reported that AT&T, Verizon Wireless and T-Mobile USA are planning a game-changing venture to displace credit and debit cards with smartphones. The venture will center on a near-field communications chip, or NFC, that's added to a mobile handset.

Customers will only need to wave their phone at a retailer's reader to make a transaction. In turn, transactions would be processed through Discover's payment network, and Barclays would be the bank managing the accounts, sources told Bloomberg.

Such a venture could spur mobile payments in the United States and supplant more than 1 billion plastic Visa and MasterCard (MA) cards, according to Bloomberg. Meanwhile, Visa is reportedly working on technology that transforms smartphones, including the iPhone, into a payment device.

Soumen Ganguly of Altman Vilandrie & Co.

It seems that a mobile wallet is just around the corner...again. Is it for real this time? I spoke with Soumen Ganguly, principal at Altman Vilandrie & Company, a boutique consultancy helping wireless carriers, handset manufacturers, private equity firms and hedge funds make better decisions in the mobile e-commerce space.

Here's his take on the state of mobile e-commerce:

The United States is the birthplace of the iPhone and Android, so why not the mobile wallet?

What makes mobile commerce — or in this case, mobile wallets — suddenly more complicated than any typical mobile product is the intersection of two industries, mobile and finance.

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