The Street.com is out today with an article citing some striking, if not misleading numbers about mobile payments. http://ow.ly/3iOb.

Aside from the fact that virtually no infrastructure is in place to support NFC payments there are other issues with the article.

Point 1. Bill pay via mobile banking applications on smartphones today, while interesting in of themselves from a retail banking standpoint, are at best an orphan cousin to what mobile payments via cell phones will be, especially using a technologies like NFC. Thus the value and transaction forecast should not be commingled, nor are they an indicator of what consumer traction mobile payments may get in 2011.

Point 2. Just because handset and chip manufacturers forecast upwards to 50mil handsets with NFC capability, there again is little correlation to what that may mean in terms of transaction volume or value. Its simply is a single data point, that indicates that handset technology is available with varying degree’s of capability. If you have covered this market long enough, you’d know that handset tech was never the barrier. In fact, as price sensitive as handset builders are to component costs, there isn’t is a single manufacture that I can find that says despite the cost of NFC in handsets to be well in excess of $1.00, that it is now, or was a fly in the ointment.

In 2011, you can be sure, that lacking infrastructure, consumers who are early adopters in 2011 of contactless stickers on phones and NFC in the handsets, will be replaying the exact same capability that 60 mil or so consumers have had in their hands with contactless plastic. I’ll guess that 50% of that 60 mil didn’t know they had contactless and of those that did less than 20& used the capability with any regular frequency.

So where does that leave us? We still lack a trusted business model between the banks, acquirers, merchants, processors and the carriers. We still lack point of sale devices that have any capability beyond simple RFID contactless (the dumb cousin of NFC). And we have three major carriers (AT&T, Verizon and T-Mobile), jumping on a credit card rail (Discover) putting together infrastructure that in theory at least, is built from the ground up to support mobile payments of some sort.

Where I think this leaves us is that a significant portion of these new NFC enable handsets will actually be used my merchants as portable point of sale devices.  And perhaps a great percentage of the population will start using their contactless plastic cards to check out via phones use in alternative check out queues.

Make no mistake about it, 2011 will be the year of news and noise about mobile payments. And there will be a lot of money put into 3 places-Specialized applications for mobile handsets, Alternative payment infrastructures and new payment cloud solutions that will be built by CSP (probably the wireless carriers) that will looked to usurp the 4 party communication and switch network run by the incumbent processors today.

There is no question that mobile payment initiatives will be bigger news (and noise) but lets not get ahead ourselves…

Related articles

• What about Mobile Payments? (brandenwilliams.com)
• INSIDE Contactless unveils SecuRead NFC solution for mobile handset market (pradeepchakraborty.wordpress.com)
• Samsung gets into the NFC business; mobile payments coming to Samsung handsets? (mobilecrunch.com)
• Rollcomm launches Rollpay mobile-to-mobile payment solution (intomobile.com)
• PayPal looks into the future and sees mobile payments (intomobile.com)