US Carriers Combine Mobile Wallets

AT&T Inc. (NYSE: T) and Verizon Wireless , with T-Mobile US Inc. as a partner, officially announced today a joint venture, dubbed Isis, to bring mobile payments, coupons, and loyalty programs to any merchant and bank through a national mobile commercial network. (See US Carriers Launch mCommerce Network.)

The group has tapped former General Electric Capital Corp. exec Michael Abbott to act as CEO and, as previously rumored, will work with Discover Financial Services and Barclays Capital to turn the phone into a credit card using near-field communication (NFC), a short-range contactless technology, at point-of-sale locations.

As it rolls out over the next 18 months, Isis will work across Discover’s national payment infrastructure, but the team plans to eventually bring other banks and merchants into the fold. (See Mo'bile Money, Mo' Problems.)

Why this matters
Mobile payments, common in other parts of the world, have been on the cusp of taking off in the US for years, but the market has been fragmented by too many parties looking for a piece of the action. Banks, wireless operators, software companies, handset makers, and third-party vendors are amongst those hoping to form a billing relationship with the end customer. Forming a unified front will help give credibility to the carriers' ambitions and keep them involved as the market grows. (See Positive Progress Predicted for Mobile Payments.)

It could also give the other major credit card brands a run for their money. American Express Company , for one, has its own mobile payments division, headed up by former execs from Sprint Corp. (NYSE: S), the only major wireless operator absent from the JV.

But it could also face stiff competition coming from Apple Inc. (Nasdaq: AAPL) and Google (Nasdaq: GOOG), which just last night showed off a new smartphone, the Nexus S, with an NFC chip on board. (See Google, Apple Fight Carriers for Mobile Money.)

For more
For more on mobile money efforts across the globe, check out the following stories:

— Sarah Reedy, Senior Reporter, Light Reading Mobile

sarahthomas1011 12/5/2012 | 4:18:22 PM
re: US Carriers Combine Mobile Wallets

Sybase 365 put out a report today that says consumer awareness is the biggest roadblock to mCommerce. Of course, phones with NFC chips is a huge one, but I agree that this is a whole new way for consumers to shop, so it will take a big behavior adjustment. Retailers should be easier to convince IF the transaction fees are lower than traditional credit card fees.

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