Isis has coalesced into something bigger, as U.S. carriers AT&T, Verizon and T-Mobile have inked Visa, MasterCard, Discover and American Express as partners to challenge Google.
Three of the largest wireless carriers in the United States have joined
Google (NASDAQ:GOOG), PayPal and others at the table for mobile payments based
on near field communications wireless technology.
Isis, a joint venture comprised of AT&T (NYSE:T) and Verizon
Wireless (NYSE:VZW), scored a major coup by becoming the first mobile payment
provider to ink all four major credit card providers Visa, MasterCard, Discover
and American Express for support in the United States.
That means the group will have a larger footprint among
retailers, where consumers will be able to purchase goods by tapping NFC-enabled
smartphones against terminals to pay for goods. Isis will also let customers redeem
coupons and store merchant loyalty cards on their phones.
"By working with the nation's payment networks --
Visa, MasterCard, Discover and American Express -- we significantly advance the
vision of an open and secure platform that provides banks and merchants with a
new and highly relevant way to connect with consumers,"
said Isis CEO Michael Abbott in a statement July 19
Isis will test its payment system in Salt Lake City, Utah
and Austin, Texas, in the first half of 2012 with support from all four payment
Winning the hearts and hands of the big four -- Visa,
MasterCard, American Express and Discover -- could be a blow to more limited mobile
payment efforts from Google and PayPal.
Google in May
unveiled its Google Wallet mobile payment play
with the notion of enabling
secure payments between NFC smartphones and wireless terminals.
The company plans to test this product in New York City
and San Francisco this summer with MasterCard and about two dozen retailers.
Currently, only Sprint's Samsung Nexus S 4G smartphones will support Google
Wallet, a limitation Google will have to break free from to see its plans reach
By joining Google Wallet and Isis, MasterCard is the only
major credit card issuer to double dip from the two major mobile payment wells.
Who will be next is unclear; the other credit card providers haven't said what
they feel about Google Wallet.
PayPal recently showed how users can tap two NFC-enabled Samsung Nexus S phones
together to let users exchange money, a solution the company promised will be
released later this summer. Sprint (NYSE:S), the only major U.S. carrier not
involved with Isis (but is a key player in Google Wallet) agreed to support American
Express' Serve mobile wallet application.
Much is at stake in this game made increasingly complex
with fragmentation among many players. Gartner said worldwide mobile payment users
will surpass 141.1 million in 2011,
with mobile payment volume expected to top $86.1 billion around the globe.
However, the growth is slower than expected and the
researcher believes mass market adoption of NFC is at least four years away.
"In developed markets, companies are trumpeting the
prospects of Near Field Communication (NFC) without realizing the complexity of
the service model," Gartner analyst Sandy Shen said. "The biggest
hurdle is the need to change user behavior by convincing consumers to pay with
mobile phones instead of cash and cards."
Indeed, if consumers don't leave their wallets at home to
pay for products with their phones, it won't matter whether Google has one major
payment provider in its corner or that ISIS has all four top providers.