NFC-Based Isis Mobile Wallet Finally Rolling Out Nationally
UPDATE: September 3, 2014
-- The company behind Isis Wallet has officially changed its name to Softcard. CEO Michael Abbot explained in a blog post that the company is rebranding itself because “however coincidental, we have no desire to share a name" with the extremist group responsible for the vicious campaign of violence in Syria and Iraq. The company had announced in July that it was looking for a new name to avoid association with the violent Islamic militant group.
Our original story from July 2013 continues below.
Businesses have been hearing about smartphone-based payments for years, but the contactless form of in-person commerce may now become more common. On Tuesday, the companies behind the Isis Mobile Wallet announced they will begin their long-awaited national roll-out later this year.
Isis, a joint venture between AT&T Mobility, T-Mobile U.S., and Verizon Wireless that was announced nearly three years ago, began a field test in Austin and Salt Lake City last fall, but only a few Android phones initially supported the payment technology. Other models with near-field communication (NFC) and a special SIM-based secure element -- components that make a device "Isis ready" -- were later added. The Isis group has said that it will support Windows Phone, BlackBerry 10 and the iPhone sometime this year.
Industry observers have noted that the iPhone currently does not have NFC, adding another data point supporting speculation that the next iPhone, expected to be released within a few months, might have that technology built-in. It's possible that an accessory to the iPhone could provide the NFC support, but that would probably be too cumbersome.
About 20 million smartphones in the U.S. do feature NFC technology, representing 35 models from the three carriers backing Isis.
The payment technology allows users to pay, redeem coupons or present loyalty cards by simply tapping their smartphone against a retailer's reader. Michael Abbott, Isis chief executive officer, said in a statement that the nine-month testing period has "proven the power of an open platform, creating an ecosystem of literally hundreds of partners dedicated to making mobile commerce a reality."
Isis has not yet revealed its roll-out plans, although it has said that 25 of the top 100 national retailers support its payment technology, including Coca-Cola vending machines, Foot Locker, Macy's and others. The Isis joint venture cited a report by the Aite Group, which estimated there will be 1.3 million locations in the U.S. with contactless payment terminals by the end of this year.
Coca-Cola has said that more than one-third of the Isis mobile wallet users in the Austin trial loaded a My Coke Rewards card into their Wallet. Jamba Juice reported that its testing in Austin and Salt Lake City resulted in an increase in incremental foot traffic and the frequency of consumer store visits, as well as boosting the introduction of Jamba Juice to first-time customers.
Solution to What Problem?
Overall, Isis said the trial -- which set up more than 4,000 businesses able to accept the payments in the two test markets -- showed that Isis mobile wallet users tap over 10 times monthly and that two thirds of active users opted in to receive offers and messages from brands.
Roger Kay, an analyst with Endpoint Technologies Associates, told us "the U.S. is a tough market to open up for this kind of payment system." He compared the U.S. market with such other markets as Japan's, where the government-run railroads launched an electronic payment system that retailers then adopted.
When asked if mobile payments were a solution in search of a problem, Kay pointed to the additional security available for mobile payments because of the possibility of verification through multiple layers, such as GPS to verify a request, transmission of a temporary PIN, or even, if they become popular, biometric sensors like fingerprint readers.
But, he added, "the reason that it's going to be successful is that people are going to think that it's cool," not to mention such added benefits as on-the-spot offers.
Other mobile payment competitors, including Google Wallet, Square and PayPal, have also been rolling out their mobile payment systems step-by-step, but none have yet taken a dominant position in the market. One new system from Finland, called Uniqul, allows customers to pay without their wallet -- through facial recognition.