Mobile payment challenges

Saw quite a bit of news on the mobile payment front the past couple of weeks. AT&T, VZN and TMO form a new venture called ISIS. According to a blogger for WSJ, there are still significant challenges.

Merchant fees paid on credit-, debit-, and charge card transaction totalled $62 billion last year. The bulk of that goes back to banks issuing credit and debit cards. Phone companies are not likely to take credit risk involved in issuing cards. So Visa and MasterCard are most vulnerable to competition. They both generated $7 billion in total US revenue last year. Adding NFC tags a $200 reader to the merchants according to the Federal Reserve Bank of Boston's estimate.