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Most NFC mobile wallet talk is 'half-baked,' analyst says

Matt Hamblen | April 6, 2011
Sprint's entry into the mobile wallet technology space could be as early as this year, according to a Sprint executive.

Sprint's entry into the mobile wallet technology space could be as early as this year, according to a Sprint executive, but several analysts urged customers not to believe much of the mounting mobile payment hype from wireless carriers and other companies.

Kevin McGinnis, vice president of product platforms at Sprint, told the Bloomberg news service this week that the wireless carrier plans to start a mobile payment service in 2011 based on contactless Near-Field Communication (NFC) technology.

If Sprint launched such a service this year, it would com ahead of the Isis pilot scheduled for 2012 in Salt Lake City that was announced Tuesday by Sprint's major wireless rivals, Verizon Wireless, AT&T and T-Mobile USA.

A Sprint spokeswoman confirmed Wednesday that Sprint "expects to enable NFC technology" and is in talks with other companies that Sprint would not name. Sprint would have mobile payments billed to a user's credit card, not to Sprint, with Sprint's earning revenues by selling targeted ads and coupons that appear on users' phones, the spokeswoman added.

She clarified what McGinnis told Bloomberg by noting that Sprint might not have the NFC capability fully in place by the end of 2011. "Rather than rolling out [an NFC] service, we look at this as enabling a capability," said the spokeswoman Jennifer Walsh Keifer. "And Kevin [McGinnis] mentioned that we could do this by the end of 2011, which of course means we can do it, but not necessarily that we will do it."

Several mobile payments trials using contactless NFC on smartphones and mobile devices are under way in the U.S. Of all of them, Visa may be the furthest along. Visa officials recently said they are prepared to move to a rollout soon based on pilots using multiple smartphone OSes working with four major banks in New York, Washington and San Francisco.

But the convenience of waving a smartphone near a reader to quickly pay for a transit fare or retail purchase is still far off in the U.S., analysts said, and Sprint is no exception. South Korea, Japan and some European countries are far ahead of the U.S. in mobile payment and phone with NFC technology.

"Sprint has been kicking the tires on mobile payments and wallet initiatives for at least three years," said Bob Egan, an analyst at The Sepharim Group, taking note of the recent report of a 2011 rollout.

Others saw McGinnis' comments as trying to prop up Sprint's image without many specifics.

"I take McGinnis' comments as kind of showing that Sprint still exists, and they are not completely out of the loop with NFC," said Nick Holland, an analyst at Yankee Group. "They are definitely a kind of third wheel, since their concept is lacking in detail."

 

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