Hope for Mobile Payments Standards

It looks like the mobile channel just found a standards champion-the Financial Services Technology Consortium (FSTC). The organization announced it is assembling a team of industry experts to help develop best practices and standards for mobile payments.This is a great step forward for the industry, as far as I'm concerned. One of the main roadblocks to the faster evolution and adoption of mobile payments in this country has been the issue of standards. With so many players involved-banks, card associations, payments processors, mobile phone carriers, merchants, etc.-experts have said that finding a single operating model by which to conduct these transactions will be very difficult. After all, they all want to do things their way and they all want a piece of the customers and their money.

The FSTC has stepped up to the plate in a way that will hopefully help along the process. According to the group, the initiative will examine the various technology models supporting mobile payments today and make recommendations on an approach that would facilitate an interoperable mobile payments infrastructure in the future. It appears the FSTC's effort has a good following. The group says that over 25 organizations, including banks, wireless carriers and technology providers, are participating and will provide a broad view of the current mobile environment and practices. The initiative is sponsored by The Federal Reserve Bank of Boston and The Clearing House Payments Co., as well as the American Bankers Association, BITS Financial Services Roundtable, NACHA and PaymentsNation. The FSTC encourages other organizations to join the initiative. The FSTC hopes the fruits of its labors will yield a model that provides interoperability to the marketplace to enable true "any time, anywhere" financial transactions from any bank, phone and wireless carrier. The goal is to recommend a "preferred" technology standard by the end of the year.

If the FSTC is able to hammer something out, this could prove to be a huge coup for mobile payments in the U.S. Of course, things remain to be seen. Just how the FSTC will get all these entities to play nicely together will be interesting. As I said earlier, everyone wants to own the customer. And when it comes to mobile payments, we're talking about a lot more fee revenue being at stake than in simple mobile banking.