This article originally appeared in the May 2012 issue of INTERNET TELEPHONY magazine.

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 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 $100 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, recently told INTERNET TELEPHONY 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.”

Google a year ago this month unveiled the Google Wallet app. Its partners on the effort include Citi, MasterCard, First Data and Sprint (News - Alert). The first Google Wallet field tests were in New York and San Francisco and involved retailers, Coca-Cola vending machines and taxis. And Google Wallet service launched in September 2011. Google Wallet initially allows mobile devices to store loyalty cards, offers and credit cards (including Citi, MasterCard (News - Alert), and a virtual Google Prepaid card), and later will enable virtual transit (although that’s now available in select areas) and boarding passes and other tickets. Google Wallet is accepted anywhere PayPass MasterCard accounts are accepted, which includes more than 124,000 merchants nationally and more than 311,000 globally.

American Express also recently introduced a digital payment platform. It’s called Serve. In addition to enabling digital payments, it allows consumer brands and merchants to deliver special offers to mobile devices, supports loyalty programs, enables money management, and more. American Express has stated it plans to invest $100 million on its digital commerce initiative, which is based out of Silicon Valley and headed up by former Motorola Mobility Ventures executive Harshul Sanghi.

Meanwhile, Visa has introduced V.me, a PayPal (News - Alert)-like service “that lets you shop without sharing your card account information with the seller when you pay.” A November blog on the Visa website notes the company is working with its financial institution clients and merchants on participation in V.me. In the meantime, the company has launched an invitation-only beta of V.me capabilities in the U.S. and Canada, as well as an open beta developer program designed initially for online payment applications. 

ISIS, a venture of AT&T (News - Alert) Mobility, T-Mobile USA and Verizon Wireless, is the other big mobile wallet push in the U.S. ISIS reportedly expects to launch in two cities toward the middle of this year.