Fierce Wireless issued a bunch of mobile predictions this week, and this one relating to mobile commerce piqued my interest. It (boldly) states that 2009 is the year that mobile commerce will finally take off. What I found fascinating about this prediction and the examples the author cites is the absence of two key players who have been thought of as front and center when it comes to mobile commerce: carriers and issuers. The conclusion I drew, whether the author meant it this way or not, is that it will be the merchant that will drive the bus, in part because they need to figure out how to use this ubiquitous consumer channel to drive incremental sales and in part because they don’t see either banks or carriers sorting out their business model issues any time soon. The other observation is that none of the rationale the author cited for his optimism is based upon the one technology that most issuers have been obsessed with and which has gone nowhere fast (at least here in the US): NFC.

I have to agree with Fierce on this one and on all counts. In this economy, especially, retailers don’t care a lick whether Bank A or B is top of wallet and with sales falling like lead balloons, they don’t have the time to sit around and figure out how to get there. Same story for carriers. Our observation is that the players who will really enable mobile commerce in a real way aren’t the usual suspects, either, but players who have come out of the retail and/or direct sales arena and who have devised ways to bring merchants, consumers, advertising and transactions together seamlessly. One of these players is ShopText. ShopText is one of our portfolio companies and it has designed a simple and elegant text messaging platform that enables commerce on any handset and with any carrier. Conversion rates are anywhere from 5 to 12x other direct promotional efforts and transaction completion rates are north of 75%. They’ve helped manufacturers and retailers move merchandise in a matter of hours. And, their platform enables issuers to devise “top of wallet” strategies that pull thru the use of their cards as well as paperless couponing appended to loyalty cards. Their mantra is that instead of looking at the phone as a third screen, they have looked at it as a mouse – enabling a “point and click” transaction more or less using keywords and shortcodes to make purchases with one or two clicks. And, their business model delivers added value to all members of the ecosystem.

With economic forecasts looking pretty grim for the next 3 years or so, it is not clear at all that retailers will be all that eager to spend the money needed to install new readers that make NFC phones work, that consumers will spend money to buy new phones with embedded chips, or that manufacturers will even be persuaded to produce phones with chips in them. So, our prediction for 2009 is that if carriers and issuers want in on the mobile commerce wave, they should begin to consider models that are more friendly to the source of the commerce – the merchant and the consumer – and start to break their addiction to NFC-enabled models that have dominated their thinking and investments over the last several years.