Isis, the mobile payment joint venture established by AT&T Mobility, Verizon and T-Mobile, claimed a major victory on Tuesday by inking agreements with Visa, MasterCard, Discover and American Express.
The consortium has been working on developing “mobile wallet” software that allows smartphone owners to make point-of-sale purchases by simply waving their device over scanners. Isis-enabled mobile devices are set to be introduced in select locations in early 2012, with more widespread launches to follow.
Isis desperately needed to partner with the four major credit card companies to have the opportunity to flourish in the highly competitive e-wallet market. Major players like Google, PayPal and Amazon have either launched or are planning to launch similar initiatives.
The technology, known as near-field communications, is expected to be a dominant force in the future of the payment industry. Research firm Gartner recently expects the market for mobile payments to increase to more than $1.1 trillion by 2014, up seven fold from current numbers.
Meanwhile, PayPal expects to process $4 billion worth of mobile payments this year, even though the technology is far from ubiquitous, PC World reports.
Tuesday's agreement comes just two months after Isis scrapped a highly ambitious plan to run the payment system on its own, cutting out the four credit card companies entirely. Verizon, AT&T and T-Mobile apparently scaled back the plan because it would be too difficult and time consuming, the Wall Street Journal reported in May, citing two sources close to the situation.
“The carriers had to include MasterCard and Visa,” Drew Sievers, cofounder and chief executive of mFoundry, a provider of mobile banking technology, told the news source. “Not including the 800 pound gorillas of the industry would make it very hard to succeed.”
In addition to providing mobile payment options, Isis plans on using NFC technology to allow users to redeem coupons and store loyalty credits with just a swipe of their phone. This will provide merchants with additional advertising opportunities and could adversely affect companies in the thriving daily deal and electronic coupon industries.
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Beecher Tuttle is a TechZone360 contributor. He has extensive experience writing and editing for print publications and online news websites. He has specialized in a variety of industries, including health care technology, politics and education. To read more of his articles, please visit his columnist page.
Edited by Jennifer Russell
