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Isis delays mobile wallet launch as non-NFC options grow

September 17, 2012

The Isis launch is being delayed

Isis’ much-ballyhooed launch of an NFC-enabled mobile wallet will not take place this month after all as the company continues to work the kinks out of the solution.

The Isis launch has been delayed several times, with the company now saying the mobile wallet will not launch this summer while not providing a new launch date. The involved parties may also be considering shifting gears by structuring the payments solution to charge retailers a flat fee for access as opposed to the typical per-transaction fee.

“Mobile commerce involves a lot of moving pieces and it is no surprise that Isis is delaying the launch of their pilot,” said Wilson Kerr, vice president of business development and sales at Unbound Commerce, Boston.

“To avoid being a ‘dumb pipe’ the carriers had no choice but to try to join forces to secure a piece of the mobile transactional gold mine,” he said.

“In fact they are trying a different model, which is to charge for access to their payment network, versus the traditional percent. PayPal, Google Wallet, Square and others are all after this market.”

Multiple delays
Isis, a joint venture of AT&T, Verizon Wireless and T-Mobile USA, was announced two years ago. It is expected to launch in two cities, Salt Lake City and Austin, TX.

Besides wanting to insure that it gets the technology and user experience right, the latest delay could be a reflection of the difficulties the carriers are having cooperating on a venture of this scale.

Isis’ original launch date was earlier this year. The date was eventually pushed forward, with an Isis spokesperson saying as recently as the end of August that Isis would launch in the summer.

“We’re working through a final punch list of things to ensure a great consumer experience and seamless partner integration,” said an Isis spokesman. “The list is short, but a few pieces require additional time.

“While we will not launch in the summer time frame, we will be back in touch in October to discuss updated launch specifics and momentum news,” he said.

NFC takes some hits
The delay is the latest blow to the use of NFC technology as a mobile payments solution.

NFC enables mobile users who have a phone with an NFC chip to tap and pay for in-store purchases at contactless point-of-sale terminals. Originally considered to be the leading contender for mobile payments, the technology has lagged more recently, with consumer and retailer adoption not meeting expectations.

Instead, other easier-to-implement mobile payments solutions have been gaining steam, including mobile apps that use 2D barcodes on a phone screen to authenticate payments and cloud-based solutions.

There are other signs in addition to the Isis news that NFC is still not ready for prime time.

Last week when Apple announced its new iPhone 5, it did not include an NFC chip as had been expected by many.

Additionally, Google continues to make NFC less of a focus in its Google Wallet, which has reportedly struggled to gain adoption as an in-store payment method, in part because of how many phones it is available on.

Instead, the company is focusing on building out a variety of wallet-related features, including enabling online payments and letting users store loyalty cards, coupons and boarding passes.

“It’s too bad that NFC is being held back, as the payment players sort through the complexities,” Mr.Kerr said.

“The fact that Apple did not include NFC means they are not ready to roll out their payment system and, as such, want to stunt the use of NFC generally and put off jumping the consumer behavior change that is required for mass adoption,” he said.

Adoption to grow
NFC still has potential as tool to enable users to engage with businesses and products.

“Samsung will continue to benefit from this, as they have wisely decided to leverage NFC in their Galaxy line for non-payment functionality,” Mr. Kerr said.

“NFC is a powerful way for consumers to interact with businesses — or products — easily and this allows the business to track where and when and with whom these interactions are happening,” he said.

“Smart brands and retailers will dive into NFC as a way to track mobile proof of presence and brand interaction. This, in my opinion, is even more powerful that the payments opportunity.”

Ultimately, NFC is still expected to gain steam over the next couple of years as more phones embedded with the technology come on the market and retailers adopt contactless POS.

“It is surprising that Isis is delayed,” said Drew Sievers, CEO of mFoundry, Larkspur, CA. “Reports indicate that they have put a lot of effort and time into their offering.

“Given the glacial pace of NFC payments, I don’t think this delay will have an impact on the ultimate outcome with Isis,” he said.

“The absence of NFC in the iPhone isn’t a torpedo into mobile payments and transactions so much as it is a setback for NFC payments. There are plenty of players — Apple and mFoundry included — that are doing mobile payments just fine without the use of NFC.”

Final Take
Chantal Tode is associate editor on Mobile Commerce Daily, New York

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One Response to “Isis delays mobile wallet launch as non-NFC options grow”

  1. Mark Premo Says:

    You guys lose all credibility when you quote the same two guys, from the same two companies in EVERY mobile payments article. Especially when they work for companies who don’t have any mobile payments capabilities or customers.

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