The Catalyst Code

“With the right software, mobile devices can perform powerful tricks” according to BusinessWeek.

No doubt there’s definitely been a flurry of companies pushing services on mobile phones, but let me take payments to express some cynicism on how close we are to the dawn of the golden age of mobile in America.

If you go to Japan you can go to lots of merchants and simply wave your phone at a pad at the checkout counter to pay. That’s because many of the Japanese mobile phones have integrated a payment mechanism that is based in part on a contactless chip ad have subsidized merchants to deploy contactless readers.

In the U.S., we have lots of companies like Obopay (mentioned in the article) that are developing text-message methods of payments. Most of these solutions are kludgy and not terribly appealing to the vast number of mobile phone users who don’t text message–and probably shouldn’t learn since text messaging is to mobile phones today what DOS was to computers (at least for those of us old enough to remember the world before Windows and Macs with graphical user interfaces and moses).

The fact that any entrepreneur is developing these solutions–and any venture capitalist is betting money on them–is a sign of desperation.

The sensible solution of having mobile phones as convenient contactless payment devices requires getting financial institutions like Bank of America, card systems like Visa, and mobile operators like AT&T cooperating. And while there’s lots of talk about experiments and breathy gee-whiz articles about waving mobile phones to pay, not much is really happening.

This lack of cooperation is largely because all of these players want to “own” the customer relationship and they all want a large fraction of the returns from mobile payments.

Maybe one of them will blink. Or maybe they’ll buy each other (or maybe Google will buy them all since it can) and get their incentives aligned that way.

This problem in payments extends to lots of other possible products and services on mobile phones including content. No doubt these problems will be solved because the mobile phone is too good a device not to do many more things better than it does now.

But it will be slow going in the U.S. and I’m afraid most of the “powerful tricks” BusinessWeek described will not be widely deployed for some time.