Mobile payments: battle between carriers and manufacturers

Mobile payment services which transform mobile telephones into digital wallets will soon be available thanks to the NFC technology. But tensions are certainly running high between carriers and manufacturers to determine who will control the market… and therefore profit from the generated revenue.

Making small purchases with you mobile telephone will soon be a daily activity. After years of work and experiments, the first commercial, large scale services will soon be released in France, notably thanks to the deployment of non-contact technologies like NFC (Near Field Communications).

But not everything has been resolved, with the Wall Street Journal reporting that the battle between manufacturers Research in Motion (RIM) and mobile carriers about the control of transaction authentication elements still well and truly raging.


Control of mobile payments
For the carriers, these elements should be securely stored on the SIM card, which allows you to use the card as a gateway independent of the mobile. But RIM wants to store this information in their BlackBerry Smartphone’s, to link the users with their handsets and limit the influence of carriers… and their pretentions of generating significant revenue from mobile payments.

This vision is also shared by Apple, with rumours suggesting that the company is working on their own NFC mobile payment scheme which would reduce carriers to a minor role while allowing them to recover the majority of revenue.

But mobile carriers have raised an issue that certainly puts them right in the frame to touch the revenue streams: they subvention the Smartphone’s made available through their distribution networks and stopping this would lead to significant falls in handset sales.

Without being in open conflict, the two sides have to come together so that operators don’t threaten to block such opportunities for new mobile services, as they did with Apple and their programmable SIM card project.

RIM has also launched experiments being conducted directly with banks to test the mobile payment functions in their BlackBerry mobiles that integrate an NFC module. In this way they have very little interaction with mobile carriers.