Isis adds Visa, MasterCard and AmEx to mobile commerce network
Financial services providers Visa, MasterCard, Discover and American Express are officially joining Isis, the mobile commerce joint venture spearheaded by Verizon Wireless (NYSE:VZ), AT&T (NYSE:T) and T-Mobile USA. According to Isis, the moves significantly expand the payment options available to mobile subscribers, at the same time extending the fledgling network's reach to encompass payment terminals already installed at U.S. merchant locations.
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 device. Isis initially stated it would roll out its own Near Field Communications-based contactless payment network designed to go head-to-head with the likes of Visa and MasterCard, teaming with Discover Financial Services to build out the necessary mobile payment structure and naming Barclaycard US as its first issuer partner.
But in May, Isis said it would instead open its system to all interested credit issuers and banks, aligning its technology with the existing m-payment infrastructure. Soon after, AT&T head of business solutions John Stankey told Reuters the Dodd-Frank financial reform law also played a significant role in the Isis overhaul. The law's "Durbin amendment" vows to make payment processing less profitable by limiting the fees that merchants pay banks and networks whenever a customer completes a purchase using a debit card.
Isis identified Salt Lake City as its first launch market, stating in April it will team with local merchants and business leaders to roll out a pilot program slated to go live in early-to-mid-2012. In addition, Isis will partner with the Utah Transit Authority to enable mobile phone-based payments across the entire UTA commuter system. Last month, Isis named Austin, Texas as its second launch market, stating it will collaborate with the Austin Chamber of Commerce and local merchants to boost consumer adoption of m-commerce services.
Isis will face competition from rival mobile commerce initiatives including the new Google (NASDAQ:GOOG) Wallet, which aligns Google with U.S. network partner Sprint (NYSE:S) and financial services firms MasterCard, Citi and First Data to enable subscribers to purchase goods and redeem coupons and loyalty rewards via Android smartphones. Contenders also include PayPal, which projects its 2011 mobile total payments volume will reach $3 billion, and startup Square, which now processes close to $4 million in transactions a day.
Near Field Communications-based mobile transactions are expected to reach nearly $50 billion worldwide by 2014 according to a forecast issued earlier this year by Juniper Research. Based on internal analysis, as well as interviews with industry players, Juniper anticipates NFC-based mobile payment services will launch in up to 20 international markets over the next 18 months, with North America and Western Europe together accounting for 50 percent of the worldwide market by 2014.
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