First, full disclosure: I love Apple’s products. We’ve had a Mac in our house since 1986, and in fact I keep that old 128K machine in the garage (although the Imagewriter II has long since been discarded), along with my RCA ‘40’s-era bakelite radio. Some things are iconic and fun to keep around. However, like most business-IT’ers, I used a Wintel PC for years, and as a CIO, I actively lobbied against the use of Macs in the workplace, because I couldn’t manage them. But that was before Steve Jobs returned to Apple with his NeXT operating system and his future vision. Now the story is quite different: As computing power gets smaller and more mobile, Apple products are hot! Innovative, stylish, and (yes) industrial strength underneath all that style and innovation.

So it was big news last week when word came out that Apple was planning to introduce Near-Field-Communications (NFC) capabilities on the iPhone 5, specifically to enable contactless payment capabilities for consumers. Since iPhone has captured something in the area of 25% of the mobile phone space already, this is a breakthrough for proponents of global NFC-payment capabilties….

Or Is it?…

Maybe not. In a 9/14/10 Retail Paradox Weekly (RPW) column, RSR played back a conversation we had with Richard Mader, the Executive Director of NRF’s ARTS committee, an industry group that has dedicated itself to the rationalization and adoption of certain standards related to store-centric retail technologies, including payments. The ARTS committee has taken steps to facilitate the coordination of standards adoption between all the interested parties (retailers, payment networks, banks, mobile network operators, and phone manufacturers) to prevent a babelian hodgepodge of conflicting and competing technologies with the new mobile payment form factor.

During the interview with Mader, when we asked about Apple’s involvement in the standards groups, he stated, “They’re the 800 lb. gorilla, but they don’t join standards groups, they don’t participate, and they don’t cooperate. “ And when we asked him last week about all the buzz associated with Apple’s new information, he simply said, “as to Apple, we all knew they would jump in- it was just a matter of time. I think ISIS forced timing. To my knowledge Apple is not involved in any industry initiative for mobile or mobile payment. They continue as IBM of the 60’s and 70’s. “

The IBM reference is one that experienced IT’ers understand. There was a day when IBM didn’t listen as much as announce. This was before the technology standards revolution that really began in the 1980’s, but reached full flower in retail in the ‘90’s with the adoption of UNIX the IP (Internet protocol) based network technologies. For years, IBM dictated the standards to be used by business technology (SNA, EBCDIC, even the 80 column card). It wasn’t bad or good — it just was. Today, IBM is a strong supporter of technology standards.

Times Have Changed

The difference between then and now is that there are very successful technologies out there right now that compete with Apple. The ISIS reference in Mr. Mader’s comment is about a partnership between AT&T and Verizon. In an 11/23/10 RPW column, we highlighted the partnership:

AT&T and Verizon have formed a joint venture called Isis to compete with the traditional payment networks for the emerging mobile payment market. In an 11/16 article, Dow Jones Newswires stated:

The venture… will be run by Michael Abbott, who was formerly chief marketing officer of General Electric Co.’s (GE) GE Capital arm. Verizon Wireless, AT&T Inc. (T) and T-Mobile USA are participating in the venture. The mobile payment network will use Discover Financial Services’ (DFS) payment network. Barclays PLC’s Barclaycard US will be the first issuer on the network. The rare cooperation between traditionally bitter rival carriers underscores the need for alliances in building a mobile payment system.….Abbott said that the initiative was open, and stressed that Barclaycard would only be the first issuer in the venture…. Unlikely to sign up, however are major credit card companies such as Visa Inc. and MasterCard Inc., which are pushing their own mobile payment initiatives… The divergent paths underscore the tension over who controls the mobile payment network, how the revenue is divided, and which party shoulders the financial and legal burdens. “

ISIS now has a website: http://www.paywithisis.com/

The underlying point is this: Unlike the ‘60’s and ‘70’s, when the conventional wisdom was that “no one ever got fired for choosing IBM “, there is competition and cooperation in the mobile payments space. That means that there are choices.

When it comes to the adoption of technology in the mobile payment space, there are a lot of choices. Just to mention a few: the Google Nexus S is already out with NFC support; there’s the AT&T/Verizon partnership; Barclaycard and VISA have teamed up in the UK; and as we reported in yet another RPW column on 10/5/10, the GSMA, an association that represents the interests of the worldwide mobile communications industry, has an ongoing initiative to deliver NFC-enabled mobile payments solutions globally. Underneath all of those choices are emerging standards.

No Tower of Babel, Please!

Apple certainly isn’t afraid to compete, and that’s a good thing. But RSR has always maintained that competing at the standards level is bad for business. Competing on feature and function promotes innovation, but creating a Tower Of Babel effect at the standards level only serves to stymie innovation. There are so many examples of this that examples from recent history aren’t necessary.

So the question retailers’ should be asking now is, “what are Apple’s plans to align to the work that has already been done? “ ARTS? GSMA? Others? Retailers deserve an answer.