Apple is taking it slow on mobile payments but carriers are likely the biggest roadblock

We recently reported that upcoming iPhone prototypes were found to contain code for Near Field Communication. However, that does not mean Apple mobile wallet – or Passbook – will let you make purchases right out of the gate. In fact, according to a Wall Street Journal report published late last night, Apple is taking a slow-go approach to mobile payments.

  • Apple’s head of iPhone software, Scott Forstall, was interested in the idea, say people familiar with the matter, and engineers on his team began to brainstorm a comprehensive “wallet app.”
  • They discussed whether Apple should facilitate payments to merchants directly, one of these people said. The idea didn’t go very far, on account of the complexity, including the possibility that the company would need to become a bank.
  • The Apple team investigated ways to make money from various ideas, such as teaming up with an existing payment middleman and taking a small cut of many transactions rather than layering on an additional fee. Some who worked on the project referred to the idea as “the Superman III” play, in honor of the movie’s greedy tech-savvy villain, this person said.

If you want to know the real roadblock, look at Google to see how its Wallet plan is going. Verizon, AT&T and T-Mobile are part of a separate, competing wallet system called “Isis” that has yet to get off the ground. However, that has not stopped the three Telcos from colluding to stop competition.

Even though Google Wallet is over a year old, it has yet to get on any of these three carriers’ devices. In fact, to get it on AT&T and T-Mobile, Google has to sell the Galaxy Nexus unsubsidized without any T-Mobile or AT&T branding. T-Mobile and AT&T refuse to subsidize the Galaxy Nexus so long that it has Google Wallet (they do subsidize the Nexus S without Wallet added). On the Verizon version of the Galaxy Nexus, the Google Wallet app is blocked. Sprint is the only carrier that allows Google Wallet; however, as a partner with Google, it would be just as unlikely to allow an Apple mobile wallet as ‘Team Isis” above.

The reality is that an Apple Wallet may not be able to get off the ground in its current form, because the carriers would block it. Although Apple is a power player and would be the best hope of breaking up the Isis Cartel, it would likely create enemies of its very influential carrier partners.

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