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Carriers Can't Take the Credit

12:45 PM -- The U.S. Tier 1 wireless operators appear to be scaling back their Near-Field Communications (NFC) ambitions, as AT&T Inc. (NYSE: T), Verizon Wireless and T-Mobile US Inc. , which collectively make up Isis, no longer aim to be a mobile payments facilitator, but a "mobile wallet" for storing a user's existing credit cards.

According to a report in the The Wall Street Journal, the joint venture has decided to try to partner with Visa and MasterCard instead of competing with them by maintaining their own direct billing relationship with their customers.

I was disappointed to hear Isis was giving up on billing, albeit not surprised given how little we've heard out of the JV since it launched six months ago. (See US Operators Partner Up for M-Banking and Isis Heads to Salt Lake City.)

What's disappointing is that direct carrier billing is one of the wireless operators' strongest -- if not only -- advantages in mobile commerce. By giving control to the credit cards, they are acknowledging that they can't compete on their own.

But they are probably right, as a name like Visa has more commerce clout than an AT&T. Pyramid Research believes that with credit card companies as partners, the route Sprint Corp. (NYSE: S) and most European operators are taking, the risks are lower and the business model is more reasonable. Of course, the potential gain is also less. (See Operators Vie for SIM-Based NFC Control, Here Come the NFC Phones and Sprint Stakes Its mCommerce Claim.)

With Google (Nasdaq: GOOG), BlackBerry and Apple Inc. (Nasdaq: AAPL) hot on their trails, this may have been Isis's only option -- but it's disappointing nonetheless.

— Sarah Reedy, Senior Reporter, Light Reading Mobile

ethertype 12/5/2012 | 5:05:37 PM
re: Carriers Can't Take the Credit

LR, wake up.  Carriers' billing systems are not a strength.  They are actually one of their biggest bottlenecks to introducing any new services and a source of continuing frustration for their customers.  I think this move is a recognition that it's better to be the mobile wallet / identity provider for payments -- and give customers one more reason not to churn to a competitor -- than to get nothing, which is what they would get by insisting on being the bank.

anneM 12/5/2012 | 4:59:22 PM
re: Carriers Can't Take the Credit

Thank you for the post. Mobile wallet is one way of storing data in the phone including existing credit cards. Of course the data is very relevant but when breached, that's when the problem comes. Considering that there are ways in finding the best credit card, we have also to consider if this mobile application is best for storing confidential information.

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