The mobile payment industry has gotten off to a rocky start. Near-field communication (NFC) has yet to catch on with consumers, so apps like Google Wallet have been relegated to a glorified digital wallet. Google Wallet's main competitor, Isis, has not even launched yet. According to Isis CEO Michael Abbott, the service is just about ready and should go live in the next few weeks. It appears that their original goal of launching by the end of 2013 will be met.
The Isis Mobile Wallet is an NFC powered payment system that lets users pay for things by tapping their phone on a supported terminal. If you're familiar at all with Google Wallet, Isis works the same way. Isis is backed by Verizon, T-Mobile, and AT&T and has already partnered with Chase and American Express. Earlier this year, Capital One and Barclays ran a pilot test program in Salt Lake City, Utah, but decided not to move forward with the service. Isis claims that users will have access to about 1.3 million payment stations worldwide and that they already have "24 of the top 100 retailers" on board.
Michael Abbott demoed the latest version of the Isis Mobile Wallet app during a recent Money2020 keynote. Although the app had been updated and the launch date is close, the demo was met with a tepid response. "The new ISIS app looks nice, but doesn't seem much different than my current Google Wallet experience" said Alex Linebrink, CEO of payment solutions company Core Merchant. "I wasn't blown away by the keynote" said Jordan McKee, a Yankee Group analyst.
There are at least two current issues with Isis and other NFC payment systems. Most Android manufacturers build NFC chips into their devices now, but US wireless carries refuse to support Google Wallet or anything besides their own Isis Mobile Wallet. Google has gone so far as to update the Google Wallet app, removing the NFC payment option for unsupported devices, in an attempt to get carriers to stop blocking the app. Verizon, AT&T, and T-Mobile are committing to Isis and not supporting Google Wallet. They have made it a point to block Google's efforts in the space.
The second issue revolves around consumers and their lack of comfort with making NFC payments. The general consensus is that consumers are not comfortable with the perceived level of NFC security. By blocking Google Wallet, carriers are not only stifling competition. They're also stifling growth of the mobile payments industry in which they're investing with Isis. Consumers haven't even had a chance to try out NFC payment options, in part because wireless carriers have been holding back support until Isis launches. If consumers could actually use the NFC payment systems that are already in place, they would have a chance to get comfortable with using it.
Consumers are not on board, and neither are most credit card companies. None of this bodes well for Isis. Jordan McKee asked an important question: "Why aren't (credit card) issuers rushing to be an Isis partner if that value proposition is allegedly so strong?"