Way back in August, when news broke that the big telecommunications companies were about to mount a near-field communications (NFC) test in Atlanta--yet another--it was rather ho-hum news. Just two months later, not nearly enough time to conduct a meaningful pilot program, the telcos took a huge leap forward, announcing they will construct a new mobile commerce network, called Isis, which will be operational in just 18 months. Whew! 

Has the world changed that much in just two months? Not really, but you get the sense that with every passing month, the stakes go higher for telcos, card companies, phone makers, banks and various start-ups. Many are convinced that mobile payments is the next big thing, and no one wants to be left behind. So, it's time to take some risks. That appears to be the conventional wisdom anyway--which doesn't mean it's accurate. 

In any case, a battle for supremacy will rage. Here's a look at the main horses. 

Telcos. What to make of the announcement that Verizon Wireless, AT&T and T-Mobile will partner with Discover Financial Services and Barclaycard US to build an NFC network that in theory could be offered to the wireless carriers' subscriber base of more than 200 million customers? It means the telecom are getting serious. This dovetails with plans by the main smartphone OS makers to build NFC functionality into their software. So, it appears likely that RIM, Google and even Apple will support this method of mobile payments, though there could be some thorny revenue share issues that emerge. Still, this is a fabulous platform to build on. 

Big Banks. Consumer giant Bank of America is bent on becoming a mobile banking pioneer. Other big banks sense the opportunity as well. Top banks, which also have massive installed bases to leverage, have engaged in several NFC payment tests in conjunction with the major card companies using a microSD card. The card is given to customers, who then insert them into their smartphones. The banks have long complained that the telecos weren't moving fast enough to add NFC chipsets to their phones. So, they had to go this route. Now the race is on. Don't expect the banks to give up on the micro card approach, which allows them greater control over the functionality.   

PayPal. The dominant online payments company would like to transfer that dominance to the mobile world. The company currently offers apps for all major handsets, effectively linking users' phone to users' PayPal accounts. Familiarity is one selling point. Conducting an online PayPal transaction shouldn't be that different from one using a smartphone. The company's app for the iPhone, BlackBerry and Android devices allows users to select payment recipients from a predetermined contact list (or enter a recipient's e-mail address or phone number) and authorize payments using their PayPal account login details. PayPal then transfers the funds from the funding source to the merchant. 

Card networks. Visa and MasterCard are bent on maintaining their network leadership as the world transitions to the mobile era. But that's an inherently hard endeavor technologically. IBM couldn't transfer its mainframe dominance to the PC world. Microsoft couldn't transfer its PC dominance to the Internet world. Discover has certainly made a move by dint of its deal with AT&T, Verizon and T-Mobile to build the Isis network. 

Start ups. We've seen a number of start-ups try to make a splash. Many have partnered with banks for limited trials in specific locals. The likes of CashEdge, Monitise, Device Fidelity and Bling Nation have generated a lot of earned media. And it's quite possible that they could be bought out by one of the big boys, a bank, a card network or perhaps even a telco. But few think a start-up will emerge as the Google of the mobile arena. The time for that seems to have passed. 

Apple. The company is thought to be readying its entrance into the field with an NFC feature that could be launched as early as next year. Apple has filed to receive NFC-related patents for such services as iPay, iBuy, iCoupon, and other service conducted via the iPhone. The consumer might of Apple cannot be underestimated, nor can its savvy with partners. The savvy deal it struck with publishers, to dent Amazon's Kindle, is a great example.   

All in all, it's way too early to handicap all of this. The interesting part is that all the component pieces of the mobile payments daisy chain have to interact to make transactions work--the card networks, the software, the banks, the hardware. So, we're going to get a lot of jockeying and subtle marketing, and the chances for rancor among the various groups will be high. The real danger is that consumers end up confused. There will likely be more than one way to conduct a contactless transaction. It may be hard for people to sort out the offers and technology from each group. 

That said, all of this may unfold a lot slower than people think. The online "revolution" is still getting underway. Perhaps the mobile payments "revolution" will have to wait a while, at least in the United States. - Jim