Telecom Heavyweights Invest in Isis Network

Published September 22, 2011

Verizon Wireless, AT&T, and T-Mobile reportedly plan to invest roughly $100 million in an effort to roll out Isis, a nationwide merchant-commerce network slated to launch trials in early-to-mid-2012.

The effort is coming together without any government intervention.

Bloomberg reports the three operators are mulling several options for ramping up Isis adoption and distribution, including pre-installing Isis software onto their phones and pushing manufacturer partners to adopt the technology.

Mobile Payments Profitable Prospect
Mobile payments are a hot topic among telecommunications carriers and financial services providers, as the companies see this as the next area of growth in the payments arena.

Carriers are among the most experienced recurring payment providers in the world because of their monthly billing procedures. Although carriers have offered billing for items such as ring tones and ancillary services for a long time, Isis would enable the carriers to provide “billing gateway services,” much like MasterCard and Visa. Though each transaction might be worth only fractions of a cent to the bottom line, the billions of potential transactions could render the mobile payments a very profitable prospect.

Verizon Wireless, AT&T, and T-Mobile USA first announced Isis in late 2010, promising services enabling consumers to conduct point-of-sale transactions, redeem coupons, and use store merchant loyalty cards via mobile devices. In May, Isis said it would open its system to all interested credit issuers and banks, and last month it welcomed financial service providers Visa, MasterCard, Discover, and American Express to its ranks.

Facing Intense Competition
Even before its release, Isis faces mounting competition from rival mobile commerce initiatives such as the new Google Wallet, which aligns Google with U.S. network partner Sprint and financial services firms MasterCard, Citi, and First Data to enable subscribers to purchase goods and redeem coupons and loyalty rewards via Android smartphones.

“The technology sector as a whole is eyeballing mobile payments initiatives,” says Kolja Reiss, managing director for mopay in Palo Alto, California, a mobile payment provider. “It is most likely, though, that it will not be a single player who will be successful with its implementation; rather, it will be a conglomeration of players that understand the technology and have access to a broad consumer as well as merchant base. As we are still in early stages with mobile payments, it seems best to foster innovation and not intervene from an official standpoint.”

Bruce Burke, founder of Gulf Bay Consulting in Clearwater, Florida, says the government is unlikely to become involved in regulating the mobile payments arena in the near future. However, he adds, before mobile payment takes off in North America as it has in Japan and Europe, there will have to be more consolidation among the provider technologies so that consumers can rely on a single mobile payment platform even if there are different competitors offering it.

Phil Britt ([email protected]) writes from South Holland, Illinois.