Visa Inc.’s announced hiring today of Bill Gajda, a top global wireless carrier trade association executive, to lead its mobile-payments initiatives could help the network brand cut through some of industry-sector obstacles blocking mobile-payment development, observers say. Gajda is chief commercial officer at the GSM Association, an international telecommunication organization that develops worldwide wireless standards for mobile communications, and after joining Visa he will continue as president of the GSM Foundation.
The hiring could help break the stalemate among wireless-handset manufacturers, cellular carriers, financial institutions, payments networks and merchants in finding a workable business model to bring widespread adoption of mobile payment using Near Field Communication, analysts say.
“So far, the fundamental problem preventing NFC from moving forward has been two very large vertical industries, financial institutions and telcos, that needed to come together to make it work, but there is very little connection between the two,” Nick Holland, an analyst with Aite Group, tells PaymentsSource. “Now Visa has hired someone very high up in the telco side of things with a lot of connections and knowledge, which suggests Visa wants to forge ahead to see some real progress on mobile payments.”
Gajda previously was chief marketing officer at the GSM Association, and before that he was a vice president at Telus, one of Canada’s largest wireless operators. He also served as a vice president of communications at Bell Canada International, an international wireless investor and operator.
The GSM Association, based in London, was founded in 1987 and stands for global system for mobile communications, which is the dominant standard in Europe and encompasses some 800 international mobile operators in 219 countries. Its counterpart is the CDMA standard, which stands for code division multiple access, developed by San Diego-based Qualcomm Inc. AT&T Inc. and Deutsche Telekom’s T-Mobile USA Inc. are among carriers using GSM technology; Verizon Communiations Inc. and Sprint Nextel Corp. use CDMA.
Elizabeth Buse, Visa global head of product, said in a statement Gadja’s experience in working with mobile-network and handset operators, “combined with his track record in helping to develop successful business models, will be a significant asset as Visa aims to commercialize mobile financial services around the globe.”
How exactly Gajda might use his telco connections to help various business sectors agree on how to divide the potential investment costs and profits of mobile payments remains to be seen, Holland says.
“Visa appears to be serious about making mobile payments happen, but there are still a lot of hardware problems to be solved,” he says, suggesting the lack of payment terminals that accept contactless payments at the point of sale and banks or merchants willing to invest in them is a big hurdle.
But recent news that Apple Inc. has secured a patent to embed NFC technology in iPhones provides fresh hope for the mobile-payments marketplace, Holland says.
I suspect that Apple's next iPhone version will have NFC built into it, and that will be a really big deal, he says, suggesting software developers, not wireless carriers, could be the most-important factor in the next phase of mobile-payment development. If Apple enables a broad base of phones with NFC, developers will probably figure out new ways to make mobile-payments work, and then more participants, including merchants, will buy into it.
Megan Bramlette, managing associate with Auriemma Consulting Group, tells PaymentsSource Visa’s hiring of “a heavy hitter” in the wireless industry illustrates it is getting serious about moving mobile payments forward, though many hurdles still must be overcome before NFC can take off.
“The concept of payments going mobile is great, but until it dramatically streamlines the customer experience and adds value for merchants and retailers, there is no real point in anyone investing in it,” she says.
