Mobile wallets coming soon to U.S.? Keep waiting

By Sinead Carew and Barbara Liston

March 28, 2011 9:40 PM EDT

U.S. shoppers awaiting the day they can wave their cellphones at the check-out counter to buy everything from books to shoes should hang onto their wallets a while longer.

About a decade after they were dreamed up by engineers and marketers, mobile wallets are still far from commonplace in the United States, due in large part to a combination of industry infighting, consumer tastes and regulatory hurdles.

That has not stopped banks, phone makers and technology companies -- fearful of being left behind -- from trumpeting the concept.

At the annual CTIA wireless tradeshow last week, service providers such as Sprint Nextel, credit card networks like Visa Inc and card reader firms like Verifone Systems all talked up the promise of mobile wallets.

Manufacturers including HTC Corp and Nokia said they are ready to embed inexpensive chips into phones to make them work like credit cards. The card networks have been preparing services for phones for years and mobile network operators are jumping in.

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The industry-wide interest has created another problem: Everybody is now jockeying for a piece of the future.

Currently, credit card companies charge merchants transaction fees. But other players in the future of mobile payments such as wireless operators AT&T Inc and phone makers from Research In Motion to Apple Inc are likely to demand a cut of sales as well.

This puts U.S. retailers in the uncomfortable position of possibly likely surrendering more from their margins.

"There are many people who want a piece of the pie and I don't know how to make the pie bigger," Dickson Chu, global head of new products for Citigroup, told Reuters after a panel at the conference.

"You've got a lot of pushing and shoving about what the business model is," added James Anderson, MasterCard Worldwide vice president for mobile.

WHO CARES?

In the technology early-adopter culture of Japan, more than a fifth of the population is registered for mobile payments, according researcher Celent. Services there included train ticket purchases by phone.

Pitching U.S. consumers on the benefits of the technology will be tougher.

"If the only thing that these new entrants are bringing to the market is another way to pay for stuff you already buy and their business model is to extract a piece of the transaction (fee), then it's going to take a long time," to become popular said Forrester Research analyst Charles Golvin.

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