Monday, August 29, 2011 at 3:26 pm.

Why the carriers will probably lose the mobile payments race

Bloomberg’s Olga Kharif reports how AT&T, Verizon, and T-Mobile plan to take on Google and other rivals in the nascent and messy (but lucrative) mobile payments industry: By investing more than $100 million in Isis, their joint venture.

The good news for the carriers is that they have money and control the vast majority of phone distribution in the U.S., so they can try to force their system onto consumers and handsets. They are also hungry for new revenue streams, as their highly profitable mobile voice and messaging services face disruption.

The bad news is that the carriers have historically been terrible at software, design, and Internet services. So there’s no reason to believe they’ll build a good payments system that anyone will actually want to use. And this is not the sort of high-bandwidth service where owning the pipe really matters.

My current assumption is that this will be an expensive failure. That said, there is no clear leader right now, either. First let’s see what kind of partnerships the carriers can forge on the merchant and payment sides.

Related: Mobile payments are a mess