Isis, the NFC-enabled mobile payments venture led by three of the four major U.S. operators, AT&T, Verizon and T-Mobile, has changed its course. Originally, the service was designed so that the operators themselves would take a cut of every mobile transaction made, with customers maintaining accounts with the carrier. Now, according to a report from The Wall St. Journal, the carriers have decided to instead set up a mobile wallet service in which customers can store their own credit card cards from companies like Visa and MasterCard.
But while this is a dramatic change for the carrier-led initiative, it’s not a step backwards for the enabling technology itself: NFC.
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NFC, or near field communication, is a short range wireless technology that enables the exchange of data over short distances. NFC chips are rapidly becoming the “must have” upgrade for modern smartphones, and have been showing up in new devices recently, including Google’s Samsung Nexus S, Samsung’s Galaxy S II, Nokia’s C7 (Astound) and the upcoming BlackBerry Bold devices announced just this week at RIM’s BlackBerry World conference. Apple, too, is rumored to be including NFC in its upcoming iPhone.
With NFC, customers can make payments using their phone at the point-of-sale, just by waving or tapping the device to an NFC reader. Users can then, in turn, receive mobile coupons back from the retailer after the payment was made. NFC is also being used in ticketing for transit systems, advertising and a number of other initiatives and mobile applications in development now.
Isis was one of the newer services to use NFC technology. Announced last November, the mobile carriers involved with the project had partnered with Discover Financial Services and Barclays US, part of U.K. bank Barclays PLC, which was expected to be the first issuer on the network.
What’s Changing with Isis?
Now, according to the Journal, MasterCard and Visa are in talks with the carriers to be included in Isis. More importantly, the carriers will no longer attempt to set up their own mobile payments network, but instead will attempt to partner with Visa, MasterCard and others to store those cards in a “mobile wallet” on customers’ phones.
Discover will still be involved in Isis, the report says.
It’s unclear how the carriers plan to generate revenue from the new venture, but WSJ speculates that they will either charge financial institutions participating in the program, or would take a cut of the revenue from the mobile coupons distributed.
While much has changed with Isis’ plans, one thing that has not changed is its use of NFC. The technology is still on track to become the backbone of many mobile payment ventures, including a Google-led program with MasterCard and Citigroup that is expected to debut this year.
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