The race to replace your wallet with mobile payment options is on.

Consumer demand for smartphones, combined with near-field communication, or NFC, technology that enables everyday purchases, is fueling the shift from credit card swipes to mobile payments. With smartphone sales expected to increase 50% this year, mobile payment services are in a mad dash to capture market share, and the growing competitive space has sparked strategic partnerships among big names.

Meet the contenders
Mobile payment sales in the U.S. are expected to increase at a 68% compounded annualized growth rate over the next five years. It's no wonder that big players like American Express (NYS: AXP) and Google (NAS: GOOG) want in on the action.

American Express recently took the spotlight when the company signed a deal with Verizon Wireless allowing mobile users to make purchases on Verizon devices using a streamlined process. As the largest U.S. wireless carrier, Verizon reaches a broad audience. The partnership comes at the right time as American Express opens its own digital payment software called Serve, which will come pre-installed on all Verizon smartphones and tablets.

In an apparent bid to boost sales of Android phones, Google launched Google Wallet, a mobile payment platform for Android users. How it works: Google's Android platform will support NFC technology (more on that in a minute) capable of turning your phone into your wallet, letting you store digital credit cards on your Google Wallet account. Just walk into a store, pick up a product, and tap your phone on the payment reader. Google's service will support the payment networks of Citigroup's (NYS: C) Citi, MasterCard (NYS: MA) , and First Data.

eBay's (NAS: EBAY) PayPal has dominated the online payment space for over a decade, but as the competition gets tough and the focus shifts to mobile devices, the company will need to make big moves to maintain its head start. One such move was initiating Titanium+Commerce, a mobile payment program that lets small businesses design their own smartphone apps for processing PayPal transactions.

Another emerging competitor in the mobile payments space is ISIS, a mobile commerce network founded as a coalition among AT&T (NYS: T) , Verizon Wireless, and T-Mobile. Similar to Google Wallet, ISIS will run on any NFC-enabled device offered by the three carriers. Payment network partners will include American Express, Discover, MasterCard, and Visa (NYS: V) .

Why this will work
For one thing, smartphones have conquered dozens of industries by gradually replacing everyday items like pocket calendars, road maps, and cameras with their ever-evolving apps. I have no doubt the move to mobile payments will quickly make credit cards a thing of the past. Who will finish the race with the most market share? The company that can get the most merchants to adopt its service. At this point, ISIS shows the most promise because merchants will benefit from a solution offering multiple wireless carriers.

Still not sure which mobile payment service will replace your wallet? Track the race to mobile payments on Fool.com and add these companies to My Watchlist -- it's free:

At the time this article was published Fool contributor Tamara Rutter owns shares of American Express. Follow her on Twitter @TamaraRutter for the inside scoop on all that is Foolish. The Motley Fool owns shares of Google and Citigroup. Motley Fool newsletter services have recommended buying shares of eBay, Google, Discover Financial Services, Visa, and AT&T. Try any of our Foolish newsletter services free for 30 days. We Fools may not all hold the same opinions, but we all believe that considering a diverse range of insights makes us better investors. The Motley Fool has a disclosure policy.

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