In an effort to protect their existing business, major card brands Visa and MasterCard have committed to near-field-communication-driven digital-wallet strategies that include storing payment information on mobile devices, allowing transactions to be completed in a manner consistent with current point-of-sale payment processing. To fully enable their plans, Visa and MasterCard require new payment-terminal hardware and software to be deployed throughout the United States.

The terminal hardware and software providers have taken a provider-agnostic approach, however, and will enable alternative-payments competitors while enabling Visa and MasterCard. This new access to the point of sale will allow alternative-payments players to hone technologically flexible approaches and focus on market-driven value propositions, according to research by Aite Group.

“The major card brands appear to be painted into a corner, deploying mobile payments strategies designed to protect their existing business,” says Rick Oglesby, senior analyst with Aite Group and author of the report. “At the same time, they are surrounded by alternative-payments providers that have the flexibility to pursue a wide variety of solutions and allow demand to drive the results. The playing field is set for a major battle, and traditional payments powers appear to be at a disadvantage.”

The report provides an overview of key participants in the digital-wallet arena: traditional payments networks American Express, Discover, MasterCard, and Visa; alternative-payments players eBay/PayPal, ProPay, SparkBase, and Square; and mobile carriers and software providers Device Fidelity, Google, Equinox, Ingenico, Isis, VeriFone, and ViVOtech.


http://www.aitegroup.com/Reports/ReportDetail.aspx?recordItemID=866