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Isis Preps Nationwide NFC Rollout

Sarah Thomas
7/31/2013

After a quiet nine-month trial in Austin and Salt Lake City, the U.S. mobile operator-led joint venture Isis is ready to take Near Field Communications (NFC) mobile payments nationwide.

It hasn't announced a launch date yet, but the group, which includes AT&T Inc., Verizon Wireless and T-Mobile US, said late Tuesday that Isis will soon work across the U.S. with the 20 million smartphones on the market that already include NFC and a SIM-based secure element.

The three partners are doing their part to grow the NFC ecosystem in the devices they offer, too. Across the three operators, 35 devices support Isis, and the carriers expect to add support for the Windows Phone, BlackBerry 10 and the iPhone later this year. (So it looks like the iPhone 5S, due to be launched in the coming months, will include support for NFC.)

Isis CEO Michael Abbott noted in a press release that the pilot proved "the power of an open platform, creating an ecosystem of literally hundreds of partners dedicated to making mobile commerce a reality." Isis will incorporate feedback from its pilots into building the next generation of its tap-to-pay service.

So what has Isis found out from its pilot? Active Isis Mobile Wallet users "tap" more than 10 times per month; two-thirds opt to receive offers from their favorite brands, an average of seven; and those Isis users that also engage in loyalty and offers tap twice as much as those that only make payments.

The company did not, however, say how many total users it has or what defines as an "active user." But it did note that contactless acceptance nearly quadrupled to more than 4,000 locations in Austin and Salt Lake City, with most transactions taking place at everyday transaction locations such as coffee shops and gas stations.

Why this matters
Mobile payments, coupons and loyalty cards have been thought to be a promising space for some time now, but the market has struggled to take off owing to competing interests, a lack of supported devices, security concerns and the need to simply convince consumers they need a new way to pay.

Isis represents the wireless operators' big, unified push into the fray, with NFC as the technology of choice. It had a few delays and road bumps in its initial trials -- people weren't happy with the extra fees that were added for the privilege of using the service, for one thing -- but Isis now appears confident it can take it across the U.S.

Nationwide access isn't a guarantee of success, though. Isis will face competition from other services such Google Wallet, Square and PayPal, and it'll have to continue to add retailers with compatible point of sale systems, phones with NFC chips on board and additional bank and merchant partners.

For more



— Sarah Reedy, Senior Editor, Light Reading

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Sarah Thomas
Sarah Thomas
8/1/2013 | 5:53:24 PM
re: Isis Preps Nationwide NFC Rollout
That is true that they had to be forced to do the right thing and do away with the charge, but they are in this business to make money. And, I don't know that it's fair to say it's "commonly recognized" that the cloud is is more successful and valuable. A lot of people have concerns about the security of a mobile wallet, and they might prefer a more tightly controlled environment than an open, cloud-based one. It's also a little too soon to say what's more successful yet since it's such a new market. I certainly wouldn't consider Google Wallet a success yet.
MordyK
MordyK
7/31/2013 | 8:49:30 PM
re: Isis Preps Nationwide NFC Rollout
The principal behind the creation of ISIS was to create a new network so that they can collect a portion of the transaction fees, which has been the carriers position from the earliest days of NFC in the 90's. After the Durbin Amendment modifying the interchange structure and removing the profit opportunities the fees were suddenly removed from the equation so ISIS shifted to an "inclusive" approach.

At the end of the day ISIS is still looking to control the accounts by charging "parking fees" for a card to reside on the device, which forces the cards to go through a TSM intermediary again controlled by the carrier.

Today however it is commonly recognized that the more successful and valuable approach is to use the cloud for wallet storage, which means that there is no need for the entire business model of individual cards and the secure element which the carriers want to control.

Partnering and forcing a single wallet to the exclusion of other wallets - be they ISIS or Google Wallet - is no longer an option for carriers as there are alternative models available aka Paypal.
Sarah Thomas
Sarah Thomas
7/31/2013 | 8:29:49 PM
re: Isis Preps Nationwide NFC Rollout
How do you see them as invading? They are leading the initiative, but it's open in the sense that they'll work any number of partners. Sprint partners with Google Wallet instead, but Google takes the lead and revenues there. Not sure if that's necessarily the superior approach.
Mordy Kaplinsky
Mordy Kaplinsky
7/31/2013 | 5:53:48 PM
re: Isis Preps Nationwide NFC Rollout
ISIS is a brute force approach to getting into a new business that hasn't worked well for the carriers, and they've been at this for close to 15 years. Perhaps a softer approach where they participate instead of invade might work better.
Sarah Thomas
Sarah Thomas
7/31/2013 | 3:52:22 PM
re: Isis Preps Nationwide NFC Rollout
When I read the release that said iPhone support would be coming, my first thought was Isis leaked that the next iPhone will include NFC. As Mike Dano pointed out on Twitter, it could just be prepping an iPhone case. Maybe it's hoping for NFC but has a backup plan?
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