The mobile wallet is hot, and it’s become more than a concept in recent months with service launches by such big names as American Express (News - Alert) and Google. But there’s a problem.
Most mobile payment solutions rely on near field communications, and less than 1 percent of mobile phones and point-of-sale terminals contain NFC chips. Gartner (News - Alert) forecasts indicate that it will cost on the order of $40 billion to make all terminals in the U.S. NFC-compliant, and that it could take five to 10 years to do so.
That’s why DigiMo has come out with a mobile payments solution that doesn’t involve NFC.
Yossi Yarkoni, DigiMo’s founder and CEO, tells TMCnet that his company wants every handset and every point-of-sale terminal to be able to do mobile payments, and without any costly integration. To allow for that, DigiMo has created an end-to-end mobile payments solution that includes a mobile app, and back end security and financial institution connections.
But there’s a potential problem. DigiMo, a privately owned company that is hoping to close $10 million in funding in the next few weeks, still needs to cement partnerships with the financial institutions on which retailers and other potential customers rely. The company is in negotiations with such financial institutions as well as with retailers, its target customers.
Rich Nespola, chairman and CEO of consulting firm TMNG Global (News - Alert), recently told Next Gen Mobility that widespread availability of the mobile wallet in Japan demonstrates the huge revenue potential for mobile money in the U.S., which is the world’s largest credit card market by far, he continued.
“Even a tiny slice of global or U.S. credit or debit card transactions presents a significant revenue opportunity,” said Nespola. “With no established dominant player in the U.S., telecoms, IT companies, credit card makers and handset makers all see a market up for grabs.”
Edited by Jennifer Russell