Isis Mobile-Payment System To Debut In September After Delays
Isis, the mobile-payment joint venture backed by AT&T Inc. (T), Verizon Wireless and T-Mobile USA Inc., is on track for a debut in September, following months of delays and a change in strategy last year.
Context & Ripple Effects
Isis has been a long road from announcement to launch: in May 2011 the carrier consortium scaled back the scope of its mobile-payment system, and months of delays followed before the joint venture of AT&T, Verizon Wireless and T-Mobile USA reset its strategy. The September target now puts the big-three wallet within reach of consumers.
Sprint tried to steal the march earlier, announcing in April 2011 that it would run its own tap-and-go payment service that year to get a jump on rivals. With the three largest US carriers finally shipping together, the contest over who controls the phone-based wallet moves from press releases to live deployments — and the story drew unusually broad pickup across TechCrunch, CNET, The Verge, SlashGear and other outlets on the day.
First-order effects
- AT&T, Verizon Wireless and T-Mobile USA move from planning to operation: their jointly owned wallet goes live in September, making the carriers direct participants in the payment transaction rather than just the network underneath it.
- Sprint's rival tap-and-go effort, announced in April 2011 to beat the bigger carriers to market, now faces a competing wallet backed by the three largest US subscriber bases.
Second-order effects
- Handset makers and banks drawn into the Isis ecosystem must align with carrier-controlled credential storage, shifting negotiating leverage over mobile-payment placement toward the carriers.
- Merchants and card networks gain a second major tap-to-pay channel alongside Sprint's service, giving acquirers and retailers room to play the schemes against each other on fees and terms.
Third-order effects
- If the carrier-backed model holds, the default wallet on Android handsets sold by these carriers becomes a carrier decision rather than a device-maker or bank one — a structural fight over who owns the customer relationship at the point of sale.
- A fragmented, carrier-by-carrier rollout raises the odds that regulators and card networks eventually weigh in on interoperability standards for contactless payments, much as they did for earlier payment rails.
The trend: US mobile payments are consolidating into carrier-controlled NFC wallets, with the big three carriers' joint venture turning the phone itself into a payment terminal they administer.