Mobile payments get serious

Mobile payments have been achingly slow to catch on with both consumers and businesses, and a newly-formed committee is charged with finding out why– and doing something about it.

The Electronic Transactions Association has formed a Mobile Payments Committee in an effort to identify and fix the problems inherent in the current e-payments environment. In an effort to get the mobile payment ball rolling, the committee will focus on educating just about everybody — consumers, merchants, lawmakers, and regulators — about the technology and its benefits. The committee is also planning to work on developing cooperation between major players in the sector, which, considering the current rivalry and splintering in the industry, may be a tall order.

Getting everyone on board
The committee consists of the big four carriers: Verizon (NYSE: VZ), whose Federal Relations Director chairs the group; AT&T; T-Mobile; and Sprint (NYSE: S). A slew of other companies involved in mobile payments will also be represented, such as Google, Wells Fargo, EBay's Paypal, and Isis. As you might expect, credit card companies, such as Visa (NYSE: V), MasterCard, American Express, Discover, and Capitol One, have also signed on.

This is a varied membership roster, and getting everyone to play nice will be tough, I imagine. The fact that these heavy hitters have gotten together at all speaks to just how important this technology is expected to be — and how lucrative. Although consumers are still hesitant to use the technology, it seems as if they want to. A recently-released study shows that 30% of those with mobile phones would like to pay for goods using their device, while 65% of people aged 25 to 34 reports already having done so.

For merchants, lower payment-processing costs are a consideration, but the main impetus is the wealth of information that can be gleaned about customers via this payment method. Businesses are reluctant to make investments in the technology, however, until they're sure that consumers are prepared to use it.  And, despite the convenience of mobile payment systems, and the fact that many use their smartphones to do comparative shopping, consumers are still leery of security issues when they use e-payments.

Fool's Take
Currently, there are many systems and plans in place, such as Google Wallet and Isis, that are available only with certain carriers and with specific platforms. It seems as if this is being recognised as a problem, and the participants are now willing to try to put aside their differences to look at the big picture. The question is:  Why now?

I believe there are two answers to this question, one of which is the recently announced partnership between Starbucks (Nasdaq: SBUX) and Square. Square has always been a force to be reckoned with in its short life and, with the backing of the latte leviathan, there's no saying how far it will go. The other answer, of course, is Apple (Nasdaq: AAPL).

If Apple's new iPhone has an embedded NFC chip, as many believe it will, there's no doubt that Cupertino will be primed to jump right into the mobile payments pool. Its new fingerprint identification technology has the privacy issue wrapped up, an issue that the company recognised some time ago as holding the industry back.

Can committee members trump these two ambitious companies? It will be interesting to see if the disparate members will be able to work together toward a communal resolution. Time is money and, if they spend too many meetings haggling with each other, these two outsiders just might leave them in the dust.