Mobile wallet industry continues to develop

Many companies in a wide range of industries are now invested in the development of mobile purchasing systems in some way, and as time goes on, they are beginning to get a better idea of just what the new systems might end up looking like.

Mobile wallet systems, which use smartphones embedded with near-field communications technology to make credit card purchases, have been something in which numerous major companies have invested heavily over the last year, and now they are beginning to get a clearer picture of the potential for the industry as a whole, according to a report from San Francisco, California, television station KGO. The array of businesses now involved in the development and implementation of these mobile payment platforms is considerable, and includes cellphone service providers, credit card companies, tech giants, startups, retailers and more.

And as a consequence of all those disparate companies in different industries being involved, there are also a number of ways in which experts believe mobile payment platforms might take shape over the next few years, the report said. The issue is that as competition among the major players in the game ramps up, there is a pull on companies that might want to join one side or the other.

"You have Google proposing, 'This is how we'd like to do it,'" Derek Kerton, the principal analyst for the Kerton Group and chair of the Telecom Council Silicon Valley, told the news station. "But you have companies like the carriers in the United States, forming an association called ISIS, saying, 'No, no, don't work with Google, work with ISIS. This is the payment consortium that's going to bring this all together.'"

ISIS is the joint venture between AT&T, T-Mobile and Verizon Wireless, the three largest cellphone service providers in the U.S., and has already struck partnerships with a number of major credit card processors and, perhaps more importantly, large national retailers. Many experts have noted that one of the reasons consumers might be driven to adopt this type of mobile payment option is through the convenience and availability of places to use it.

Companies looking to link accounts across multiple platforms

Another way in which consumers may be incentivized to use mobile wallet purchasing systems is by giving them the option to link some of the other account types they have directly to their smartphone, the report said. For instance, some retailers might allow them to link their NFC-enabled smartphone to not only their credit card, but also the points they've earned on a store loyalty account, or the cash back they've accrued on a rewards program. Some might also let them attach their social networking accounts, which themselves could be linked with local deals and social couponing services to give them more options.

The incentive to do this also exists for businesses large and small, the report said. Having the ability to link numerous accounts can be both convenient and, in the end, money-saving, which many may prefer to carrying around cash and coupons they've clipped. Further it might give companies a better idea of who's shopping with them, what they're buying, and other habits they might have.

"It will track the payment for you," Kerton told the station. "You can connect it to social networks, and tell your friends, 'Hey, I just bought coffee at this Starbucks. Would you like to join me?' So a lot of automatic things that can trickle off by connecting that payment mechanism to a device that has Internet connectivity in it."

However, many have noted that the lack of available smartphones capable of handling this type of purchase is another stumbling block to widespread mobile wallet adoption. It's expected, however, that this concern will be eliminated within the next year or so as developers roll out the next generation of smartphones, many of which are expected to come loaded with NFC technology. In the end, it's believed that the mobile wallet industry could be worth tens of billions of dollars within the next four years.

Further, analysts have also noted in the past that many consumers may still be wary of the kind of technology this type of payment would require. Many polls have shown that consumers are largely concerned with the security of mobile wallets with respect to their traditional credit card use. Experts have pointed out that the data encryption these systems use is advanced far beyond the protections standard magnetic strip credit cards provide, but also acknowledge that the only way these concerns will be allayed is through gradual use of the systems.

Consumers who want to protect their own finances should also take the time to order copies of their credit reports. This will help them identify any potential unfair markings that may be taking a toll on their credit ratings.