LAS VEGAS–Brace for more merchants to begin developing proprietary digital wallets at the same time they announce their participation in broader wallet schemes.

Wal-Mart Stores Inc. and Target Corp. are among major retailers said to be behind one merchant-led mobile digital-wallet scheme in development (see story).

But these same large merchants simultaneously may develop their own mobile wallets as mobile-payment experimentation runs rampant this year, one payment industry expert suggested here March 6 at a presentation on Near Field Communication technology-based mobile-payment schemes during the Cartes in North America Expo & Conference.

“This will be a year of broad experimentation, when we see merchants working on multiple mobile-wallet initiatives,” David Talach, recently named vice president of strategic partner development at VeriFone Systems Inc., told PaymentsSource in an interview following the presentation. Talach previously was the terminal-maker’s vice president of global product marketing.

Certain large merchants likely will join forces for a broad merchant-organized wallet such as the one involving Wal-Mart and Target, Talach said. “Merchants will also join broad wallet initiatives like Isis, and at the same time you may also see them developing their own mobile wallets to satisfy other, specific objectives.”

Isis on March 5 said VeriFone is among several payment-technology firms it is collaborating with to ensure point-of-sale acceptance (see story).

No single proposed mobile-wallet scheme has the lead so far, Talach suggested.

And as merchants test and develop various schemes, two main types of wallets are likely to emerge, he said.

“Certain merchants will want to own the mobile-wallet experience, so you will see them extending the look and feel of their stores to the wallet to create a whole mobile-wallet store brand experience,” Talach suggested. “Other merchants may be mainly interested in driving down transaction costs, so they may use the mobile wallet primarily to steer customers to using specific tenders.”

For example, a large national merchant might join a broad mobile-wallet initiative such as Isis to benefit from the “stickiness” of being among a broad array of payment options it offers, Talach said.

But that same merchant might develop a proprietary wallet that offers consumers different benefits for paying with a private-label debit card that withdraws funds directly from the consumer’s checking account via the automated clearinghouse system, he suggested.

“Merchants will pursue diverse mobile-wallet strategies to achieve different goals,” Talach said.

The explosion of development eventually may result in “wallet overload,” but in the near term only a handful of major wallet schemes are likely to gain broad adoption, he said.

Talach bets that by the end of this year two major NFC-based mobile-wallet schemes will dominate the scene: Isis and Google Wallet.

Odds also are very good that a broad merchant-led wallet scheme also will fall into place this year, Talach said, but he could offer no specifics on its technology.

PayPal Inc. is developing a fourth major mobile-wallet effort likely to become entrenched this year, he forecast.

“PayPal is the dark horse, coming more or less out of nowhere with a mobile-wallet scheme that aims to be technology-agnostic,” Talach said.

And just to be clear: VeriFone does not plan to launch its own mobile wallet, Talach confirmed.

“We see 2012 as a year of a great deal of experimentation, and we think our best role will be serving merchants as partners in their various mobile wallet efforts,” he said.

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