May 26, 2011, 3:50 PM — While Google had some notable partners at the launch of its mobile payment platform, the companies that weren't there could end up determining the success of the project.
Google on Thursday announced a platform and a trial that will let people tap their NFC-capable phones against a reader in a retail store to pay for goods. Sprint, Mastercard, Citi and First Data are supporting field trials in New York and San Francisco. More than 120,000 retail outlets including Macy's, Bloomingdales, Subway, Walgreens and others are involved.
But the three other national mobile operators, which back a different mobile payments platform, did not come out in support of Google's initiative. Neither did companies like Apple, Microsoft and Research In Motion that make non-Android phones.
"The other operators have their own thing, Isis, which is clearly in direct competition to this," said Nick Holland, an analyst with Yankee Group.
Isis is a nationwide mobile commerce network that uses NFC technology and was created by AT&T, T-Mobile and Verizon. While it has the backing of three of the four nationwide operators, it has a significant challenge, Holland said. "Isis doesn't really exist. A pilot in Salt Lake City in 2012 is the best they can come up with," he said. "Isis really needs to get their act together quickly if they're going to compete."
If Google's offering gains traction, the other operators might decide to support it instead of Isis. "I would not think that carriers' loyalties today are set in stone," said Avi Greengart, an analyst with Current Analysis. "If they see this take off, they'll back it."
In fact, it may be difficult for them to prevent customers from using Google Wallet in favor of their own offerings. "Are they prepared to say they're not going to have Android devices because they might be able to use Google Wallet?" Holland said.
Which platform the operators back may also depend on how much they stand to gain from each. "The question I have is whether Sprint is getting anything out of this monetarily," Greengart noted. The operators would like to take a small piece of each transaction made using their phones.
In the event announcing Google Wallet, held Thursday in New York City, neither Google nor Sprint said if there is any such transaction cut going to Sprint.
Sprint could forgo such a cut if it thinks that Google Wallet might attract new users to its network. That could happen because Google has created a new kind of incentive for people to use Google Wallet.
"The reason why you'd want to have Google Wallet is not because it's more convenient to pay with the phone than to pay with the credit card," Greengart said. "The reason to pay with the phone is because it's cheaper."