The More Things Change...
Good point -- the merchants are part of the ecosystem too. Even if the terminals were free, I'm not sure if merchants want to promote the kind of low-value transactions that mobile NFC is all about. At a low enough sales price points, the merchant discount rate might well offset any of the merchants' sales margins.
Payments is not the only use for NFC in mobiles. Carriers have an opportunity to drive revenue through NFC applications and services, too, as well as advertising. Standing at a bus stop and want to know when the next bus will arrive? Tap your NFC phone against the NFC tag at the bus stop. Want a coupon for $0.50 off a bottle of Coke, tap your NFC phone on the NFC tag embedded in the Coke ad poster. See an ad that interests you and want more info? Tap your NFC phone on the NFC tag in the poster and get the info into your phone via the Internet without having to key in any data. That sort of thing.
That's a very good point. I think the carriers will need to recognize that NFC is not only for mobile payments and can be monetized in many different ways. From talking with banks, I get the sense that they understand this too. For this reason, I think that although banks are willing to pay OTA provisioning costs for the "virtual" card, they are not inclined whatsoever to take on any of the NFC chip costs.
Red, I think you've hit the main obstacles. The need to agree upon the way the NFC chip will be integrated into the phone and activated and controlled is a big one. There are some proposed standards, but I'm not sure whether any of them will turn out to be accepted widely. Has anyone seen a good comparative analysis of these?
Another thing that occurred to me recently is a new twist on the recurring theme of the "chicken and egg" problem. That is, how do you get widespread adoption if there are not enough terminals with NFC readers and how do you justify deploying such terminals if there are not many phones yet? Well, there's talk of requiring replacement of terminals with devices that support end-to-end encryption to prevent data breaches. Maybe this represents an opportunity to piggy-back deployment of terminals that incorporate NFC readers at the same time - maybe even incorporate chip & PIN at the same time, as long as equipment would be getting replaced.