Just as the mobile payments tide seems to be turning against NFC, the much-delayed US carrier initiative driven by that contactless technology has gone live. Isis Mobile Wallet, which has spent the past year in limited local trials, is now available nationwide, backed by Verizon, AT&T and T-Mobile.
The three operators’ goals for their mobile payments collaboration were originally bold ‘ when they announced the plan three years ago, they aimed to sideline both Google and the major credit card processors in the m-payments value chain. However, by May 2011 they were scaling back their ambitions significantly, welcoming Mastercard and Visa in to the fold.
The initiative has hit various delays and hurdles ‘ lukewarm uptake of the terminal equipment by merchants; conflicts of interest with Google’s own Wallet (which Verizon famously failed to implement when it was launched on the Galaxy Nexus); rising doubts that NFC will be the technology of choice for m-payments, stoked by PayPal, Amazon and others favouring alternative approaches.
Nonetheless, Isis Mobile Wallet has reached consumers and is available on selected smartphones, though not, of course, the iPhone ‘ Apple’s coolness towards NFC has been another problem for the standard, while even early supporters like Nokia have focused on it mainly for non-money applications such as swapping contact details by tapping handsets together.
To encourage uptake, Isis is offering various incentives. Its customers can get free Coke drinks from vending machines while Jamba Juice is giving away onem smoothies to Isis users. Meanwhile, purchases made from an American Express Serve account via the Isis wallet can claim a 20% discount up to $200. Such offers may encourage customers to try the wallet and, Isis hopes, realize how simple it is, but adoption will really depend on the facility being preloaded in handsets. Currently, users with compatible devices need to get an enhanced SIM card and download an application from Google Play (or sign up in a store) to use the service.
Mobile operators have been desperate to see NFC underpinning m-payments because it is usually implemented and secured through integration with the SIM card, which the carriers control. This gives them a far more prominent role in the value chain than when web-based methods, or tools like the Square device, are used for phone-based payments in-store. However, those alternatives have several advantages ‘ they may not require merchants or consumers to adopt new equipment, and they are backed by the giants of online payments and retail such as eBay and Amazon.
Meanwhile, American Express is standing back from the mobile payments battlefield and says it is not interested in creating its own wallet. “We want our card members to use their cards in whatever form or technology they choose,” David Yoo, SVP of mobile products and services, told ZDnet. It plays a role in initiatives like Isis but has steered clear of large-scale trials with operators like those conducted by Visa and Mastercard. Its main priority is improving its mobile app, which it updated this week to support payments with reward points ‘ and to wait and see how the technology wars pan out. “There are many different types of mobile wallets, so it’s hard to pin down which technology will win,” Yoo said.