Verizon Blocks Google Wallet, Well Not Quite !

Tweet

This had to happen sooner or later. The fact that we live in the world of co-opetition is best seen in the  evolving world of mobile payments. Everyone either has a mobile wallet of their own or plan to have one. The notable ones of course are google wallet, ISIS (the consortium of carriers - AT&T, Verizon and T-Mobile), Visa, Mastercard, the card issuers and the list goes on...the problem is that while they are competing, they also need to work with each other for the business model and technoology to work and create real value.

I think thats what led to this news story in which Google said that Verizon had asked them not to include the Google wallet in the upcoming release of Samsung Galaxy Nexus. That means Galaxy Nexus owners will not be allowed to download Google's new NFC-based tap-and-pay application from the Android Market.Instead of Google Wallet, Galaxy Nexus users will be offered Isis, Verizon's forthcoming NFC payment system, expected to launch in mid-2012. Isis is a joint partnership between AT&T, T-Mobile and Verizon.



Later, Verizon clarified that they were not "technically blocking" the app. At least they blamed it on security - What seems to be at issue is whether Verizon's security team can integrate Google Wallet into a "secure hardware element," or the system for storing private data, in phones with near field communications (NFC) technology. Google Wallet would need to work with whatever secure element Verizon and its partners in the Isis mobile payment venture are using. The secure element contains a user's personal information that allows a payment to be made.

The battle of course is about who controls the secure element and hence the key to the application. To me, thats the crux of the issue.


While we can get stuck in the technical issues, the issue is a pretty fundamental one. Most of these players need to work together for a successful business model and the stakes are high. The go-it-alone approach is likely not going to succeed although PayPal and Square may have a different opinion.

Remains to be seen who has the most leverage and staying power because I suspect its going to take a long time before mobile payments, especially in the offline world, becomes main stream.