Our long, slow slog towards ubiquitous mobile payments isn't getting any shorter, and today, comments from Visa show that it's going to get more contentious before it gets better. Visa's CEO Charlie Scharf said that "it is totally appropriate" to charge companies like PayPal and Google a fee when their digital wallets get used. Both PayPal and Google offer something called a "staged wallet," which means that those companies act as a kind of intermediary between you and your credit card. That theoretically helps make your wallet easier to use — since it can contain multiple cards — but Visa and Mastercard really hate this approach because it means they can't collect as much data about your purchasing habits.
Scharf's statement comes on the heels of an already-announced Mastercard program called the "staged digital wallet operator annual network access fee," which is a long way of saying that it wil begin charging companies like PayPal when they use a Mastercard plugged into a PayPal digital wallet. Ebay, PayPal's parent company, has gone so far as to list this fee as something that could harm its business in a recent SEC filing, as Tom Noyes has pointed out.
The upshot is that these fees will make it harder for companies like PayPal and Google to make their mobile wallets profitable, ceding precious margins to Visa and Mastercard — each of whom are offering their own mobile payment products. It's yet another sign, as if you needed one, that we are far from having either the dominant winner or the necessary cooperation for mobile payments to really take off.
Update: In response to the raft of stories about Scharf's comments, a Visa spokesperson told Reuters that it has no plans to implement the fee. It's a small about face, though Visa claims that Scharf's comments "were about evolving relationships with payment industry participants, rather than the potential for a specific new fee." Discover has also said that it doesn't plan on implementing a fee. Both are good pieces of news for PayPal and Google, though if nothing else Scharf's comments should serve to put them on notice that Visa has no intention of becoming the equivalent of a "dumb pipe" in mobile payments.