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Google Wallet on Galaxy Nexus: Another NFC Fail

Verizon Wireless blocked Google Wallet on its Galaxy Nexus phone, another roadblock for NFC payments in the USA.

December 6, 2011

Verizon has blocked the Samsung Galaxy Nexus from running Google Wallet, Google's NFC-based pay-by-phone service, according to Computerworld, presumably because Verizon backs a competing standard called .

This is just another blow to NFC, the little technology that just can't get a break in the U.S. because nobody's willing to settle on a standard for mobile wallets.

I've , and I'll say it again: there's just too much money and too many customers at stake for any of the big players—mobile OS providers, carriers, banks, and credit card companies—to give up control to any of the others. So we aren't likely to get a single NFC payment standard, and we're going to have to wait until devices (including phones and payment terminals) support multiple standards.

Google Wallet is Sprint, Google, Citibank and Mastercard.

Isis is the three other wireless carriers, but so far no banks or credit card companies.

There's wide speculation that Apple will deploy yet another system next year, based on iTunes and exclusive to iDevices.

Google and Isis aren't taking a cut of mobile payments, so the concern here is more subtle; it's about ecosystems and control. Each payment system can connect seamlessly with coupon systems, loyalty cards, mobile advertising and point-of-sale terminals, and there's a potential for profit in each of those steps.

There's an additional benefit for companies like Apple, which would both sell products and control a payment system. Apple has understood this for years, and it's the whole basis of Amazon's business: once you have someone's payment info on file, it becomes very easy to get them to buy things from you, because buying things becomes very easy.

ATMs Went Through This, Too
We're still in the hideous, warring, land-grab phase of this business, where the competitors think they can freeze each other out. There's hope, if you look at the history of past payment systems in the U.S., but also a warning.

As ATM networks got started, we had competing, regional networks such as NYCE, Tyme, and Honor. Eventually most cards ended up working in most machines through a combination of networks consolidating, banks signing up for multiple networks, and Mastercard and Visa making deals with banks to promote debit cards.

Merchants used to be a lot pickier about credit cards, too. Visa used to have a TV ad campaign with the tagline: "… and they don't take American Express." Some smaller merchants still don't, because Amex charges higher transaction fees than Mastercard and Visa do, but the tag line is less valid than it used to be.

In all of those cases, the industry didn't come around to one standard, but ATMs and merchants eventually supported multiple networks.

The warning comes in case platform providers and carriers try to drive usage to their preferred platforms by levying extra fees on the non-preferred ones. (Hello, ATM fees!) It would be quite a bummer if Verizon ends up permitting Google Wallet (probably as a "third-party" app), but only with an extra transaction fee.

A Jumble And a Mess
Since NFC hardware is actually a standard, we're likely to eventually see Android phones that support both Google Wallet and Isis, just like the terminal at your local Walgreens takes Mastercard and Visa. Ditto for merchants. But it's still going to be a while before that happens, so it's going to be a while before NFC payments are viable or easy in the United States.

And what of iPhones and Windows Phones, which are also tipped to get NFC in 2012—where do they fit in? Microsoft doesn't intend to run its own wallet service, but it's not clear whether Google will give Microsoft access to its service. There are too many questions, and too many players, for consumes to have any sort of clarity here.

It's a jumble and a mess. I'm still seeing widespread NFC payments in the U.S. in 2014 at the earliest. Here's my payment tip: carry a credit card and cash.

For more, see and the slideshow below.