The Galaxy Nexus rolling out on Verizon Wireless without Google Wallet is just the beginning of mobile payment politics and a sign of the fragmentation to come.
The conflict of interest for Verizon is obvious. As a member of ISIS, the joint venture aimed at creating a universal NFC mobile payments system in the United States, Verizon probably had to think twice about allowing Google's new mobile wallet product on one of its devices.
Drew Weinstein, CEO of Sequent, provider of an NFC payments platform, says it doesn't have to be this way. In the end, he says, NFC will live and die by the kinds of innovative solutions dreamed up by creative developers. For that to happen, Weinstein says NFC has to work regardless of whose wallet is installed on the phone.
To that end, Sequent provides an end-to-end software solution that enables consumers to download payment cards and other credentials to their mobile devices. Consumers can then use those credentials to make electronic payments, take advantage of offers and access information provided by operators, retailers and financial institutions.
Likewise, using Sequent's middleware, developers can allow access to those credentials from their apps, essentially freeing the user from needing to depend on any single "wallet" technology like ISIS or Google Wallet. "Our goal is to make the app itself the wallet or the card," Weinstein says.
Weinstein resists the temptation to call 2012 "the year of NFC," but he says the pieces are coming together. The key hardware challenges are being met and the infrastructure is finally being put into place.
Weinstein contends that mobile payments will drive the ecosystem and change behavior, but he says that's just the tip of the iceberg for the technology.
"I think we're going to start to see massive amounts of innovation," Weinstein says. "Three years from now, we're going to see use cases that nobody could have predicted."
Regardless of how many times we've heard it proclaimed that this will be the year of NFC, spats like the one between Google and Verizon Wireless could be the first real signs that it's moving somewhere. When companies start fighting, it usually means there's something real at stake. And with NFC and wallet technologies, it appears there is most definitely a prize to be had.
Meanwhile, industry analyst Jeff Kagan thinks that Verizon's decision to block Google Wallet could even lead to a showdown in court.
"Verizon says the reason is because of security around mobile payments," Kagan said, "and that is truly a part of it, but that is not the only reason. Verizon wants to control competition."
Kagan says it's a wait-and-see game in this case, as there's limited precedent for what's happening here. "So who has the final say?" Kagan asks. "Is it Verizon Wireless because they own and run the network, or is it Google because they provide the smartphones?"