The mobile payments space continues to heat up as Google, several wireless carriers and possibly Apple position themselves to be major players in the emerging space, with no clear winner in sight yet.

Google, whose mobile wallet has not caught on as quickly as it might have hoped, announced new capabilities this week positioning the wallet to compete with Apple’s Passbook app.  The much-delayed Isis, a mobile wallet solution from several wireless carriers, will supposedly finally launch in the next few weeks while rumors are rampant about whether or not Apple will include near-field communications in its newest phone.

“NFC is still in its infancy and will be for the next few years,” said John Caron, vice president of mobile at Catalina Mobile, St. Petersburg, FL. “What could hurt Isis, and others, is a failure to look at mobile payment as part of an overall mobile experience.

“A mobile wallet is not mobile commerce – it’s part of mcommerce,” he said. “To date, there’s been a lot of focus on payment, but that’s at the end of the consumer’s experience.

“What happens up to that point to drive the use of mobile payment –NFC, QR code or cloud – is even more important.”

Getting in right
It has been two years since Isis, a joint venture of AT&T, Verizon Wireless and T-Mobile USA, was announced. The launch was delayed from earlier this year, with Isis promising for several months now that it will launch this summer.

With the end of summer in site, the company continues to insist Isis will launch, suggesting the debut will take place sometime in September.

The delay in Isis could be a reflection of the difficulties the carriers are having cooperating on a venture of this scale.

Isis may also be taking its time to insure that it gets the technology right.

“Wallet technologies are rapidly evolving ahead of market demand and consumer adoption of this new technology is still in its infancy,” said David Sikora, CEO of Digby, Austin, TX. 

“In a marketplace rife with concerns about consumer privacy and security, it is far better for Isis to ensure their wallet technology is trustworthy before introducing the product to market,” he said.

While Isis has been hard at work signing up partners over the past few months, there has also been a lot of activity from other players in this space. As a result, while Isis appeared groundbreaking two years ago when it said it would use NFC to enable tap-and-go mobile payments, the offering now appears late to game.

Not only is there another NFC-enabled wallet already in the market from Google but the overall enthusiasm for NFC as a mobile payments solution has dwindled.

While analysts still expect NFC to play a role in mobile payments, the expectation now is that it will be a few more years before there are enough NFC-enabled handsets and contactless point-of-sale systems in the market for NFC to gain any kind of meaningful traction.

At the same time, there is growing support for other solutions such as bar code-enabled mobile apps that smartphone users and retailers can easily take advantage of today.

Broadening appeal
In an attempt to make Google Wallet more broadly appealing, the search giant said this week that it will add new functionality such as the ability to store coupons, airline and transit tickets, gift cards and concert tickets.

To date, Google Wallet enables users to store their credit cards on their phone and make a payment via NFC.

“Making the Google Wallet extensible enough that a large, brand sensitive retailer can make it part of their own offering is critical for the top end of the retail market,” Mr. Sikora said.  

The new capabilities are similar to those recently announced by Apple for its new Passbook app, which will be one of the new features of iOS 6 and will store boarding passes, movie tickets, retail coupons and loyalty cards.

As of yet, Passbook does not include the ability to store credit cards.

Creating an experience
The wild card here is Apple.

The company is reportedly taking its time in mobile payments to see what works so it can come to market with a strong user experience.

While the rumors are flying about whether or not the expected new iPhone this fall will have an NFC chip that could enable payments, Apple’s history would suggest it will wait until it becomes clearer how consumers will use mobile payments.

However, if Apple were to come out with a mobile payments solution either this fall or soon after, it could be a game-changer.

“Apple’s iTunes, and its 400-plus million accounts makes Apple a significant player in mobile payments,” Mr. Caron said. “The integration of Passbook, NFC and iTunes on an iPhone makes it an incredibly powerful mcommerce solution.

 “There is no device more personal than a smartphone,” he said. “Failure to respect that will mean failure to scale.

“Apple is wisely looking at how to create an experience – not just another feature.”

Ultimately, it is still too early to tell which one of these solutions will be the bigger winner with consumers and retailers. The winner also might be another company entirely, such as the consortium of retailers that are working on their mobile payments solutions.

To date, one of the biggest success stories in mobile payments has been Starbucks, suggesting that the key to success here is giving consumers something that enhances their experience.  

“Starbucks’ mobile payment is successful not because using the app is easier than taking out my card – it’s not,” Mr. Caron said. “It’s successful because it was built to scale from day one, it’s smartly engineered, the Starbucks staff knows what it is and how it works – and can evangelize it – and it’s integrated with their loyalty program.

“Their focus on what I would call ‘loyalty commerce’ is what has driven their success,” he said.

“Personalizing the mobile experiences is what will drive faster adoption and that represents the real opportunity in mobile.”

Final Take
Chantal Tode is associate editor on Mobile Commerce Daily, New York