Has the time finally come for mobile payments? We've been hearing about it for years but Bloomberg is reporting today that Google will announce this week a mobile payment system that will work with select Android-powered Sprint phones.
The service, which would use near-field communications (NFC) technology, would focus not just on payments but also rewards offers, coupons and targeted advertising, something that goes right to the heart of Google's revenue model.
The report said the service would roll out in New York, San Francisco, Los Angeles, Chicago and Washington. Google is hosting a press event in New York on Thursday.
The timing may be right for the slow roll-out of a system like this, wallet-replacement technology. I'm not saying that I expect to see these payment systems going mainstream overnight. Smartphones have hit the mainstream, the comfort levels with apps and mobile broadband are gaining traction and the trust levels around mobile security are improving.
Personally, I'm ready for it. But, like many other technologies before this, fragmentation will slow down the progress. The Bloomberg reports suggests that Apple may soon roll-out a similar NFC payment system and highlights ISIS, a joint project between AT&T, Verizon and T-Mobile expected to roll-out in two cities early next year.
By putting different technologies into the marketplace, it will force hard choices for consumers, retailers and advertisers. There are some technologies where choices are a good thing but other technologies where a winner really has to be declared - you know, like Blu-Ray or HD-DVD?
Mobile payments will be an important turning point for businesses, consumers and the overall economy. And while the fragmentation may seem like an obstacle for a while, it will actually force the players to differentiate themselves by innovating and enhancing the services quickly.
Under that scenario, the technology will be even better in the coming years as it starts to spread into the mainstream.