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Isis in stasis (UPDATED)

(UPDATED) The world awaits Isis, watching Salt Lake City, Utah and Austin, Texas in hopes of catching a glimpse of the brave new payment world promised by U.S. wireless carriers when they announced their plan to create an NFC mobile payment platform nearly two years ago. Now those same carriers have had to contribute another pile of money to keep the venture going while it irons out the wrinkles that have put its pilot programs in Austin and Salt Lake City on hold.

According to a source familiar with the company and its plans, the three wireless carriers behind Isis have quietly invested another $150 million in the joint venture. That's on top of the reported $100 million the partners initially put into the plan.

Isis would not confirm the information, but even employees of the company admit they're still not sure exactly when the pilot program will officially begin, only saying that it will happen "soon."

What Isis is

Isis, of course, is the mobile payment joint venture backed by three of the four largest wireless carriers in the U.S — Verizon Wireless, T-Mobile USA and AT&T Mobility — meant to leverage the carriers' relationships with 200 million subscribers.

Announced in November 2010, Isis, along with initial partners Discover and Barclaycard, intended to create an NFC-based mobile wallet that would compete with the big credit card networks and replace plastic cards, keytags and tickets. It would provide an app for mobile devices where users could store not only payment credentials, but also loyalty cards, transit passes and even ID. Consumers would tap their phones to pay, ride and save.

Since that announcement, however, Isis has been forced to lower expectations and overhaul its business plans to create a simpler mobile wallet to compete with the likes of Google Wallet. It would store credit card data and would handle payments at the point of sale by riding on existing credit card networks.

Along the way, it has cobbled together a slew of technology and payment partnerships with handset manufacturers, POS-makers, additional card brands, issuing banks and merchants. The company even announced that Austin and Salt Lake City would be its test sites.

And that's how it sits. Various timelines have come out of Isis since the beginning, with the most recent — and realistic — expectations that pilot programs would begin at the end of this past summer.

Hurry up and wait

According to Jim Stapleton, chief sales officer for Isis, the venture is plugging along just fine. During a keynote presentation to a roomful of merchants at the RAMP Mobile Retail Services Summit in Chicago this week, Stapleton outlined Isis' distribution plans and progress, explaining that everything is ready to go in the test cities.

Distribution of the SIM chips necessary to store payment credentials securely will be handled through the carriers' 200 stores in the Austin and Salt Lake City areas, Stapleton said. Consumers can have the chips installed in their handsets for free by store employees when they buy or bring in their phones. The Isis application will be installed in-store as well.

This will be the distribution plan for an eventual rollout of the product beyond the test ciities as well. Consumers will get their Isis mobile wallets and chips from the carriers they trust, Stapleton said.

(UPDATE: An Isis spokeperson reached out to Mobile Payments Today to explain that future distribution of the Isis mobile wallet app will not be through stores only. The spokesperson's full email explaining the two-step process for obtaining an Isis mobile wallet is below.) 

Stapleton also highlighted Isis' massive awareness campaign in Austin and Salt Lake City. Any coverage of Isis from outside the test markets may be skewed by a lack of just how pervasive the company's message is in the pilot cities, Stapleton said. Across various marketing channels, including online and out-of-home, Isis has purchased "a billion impressions" in Austin and Salt Lake City, Stapleton said.

"You could be here in Chicago and not even know Isis is going on," Stapleton said.

What's more, marketing efforts include in-store kiosks, product demonstrations and collateral at all carrier stores, Stapleton said. Plus, new customers will be enticed to try Isis with an offer to put $10 in their Isis Mobile Wallet just for signing up, he added.

That's a bug not a feature

But several sources familiar with Isis, including employees, admit that the distribution model itself is partly to blame for the delay in the pilot program's launch. The sources said stores are still waiting on SIM chips; one source also blamed the delay on issues in training store personnel and provisioning phones once the chips and software are installed.

Additionally, the sources said Isis is being extremely cautious about ensuring that customers have a positive experience with the mobile wallet. This includes keeping the app out of the Google app marketplace, Google Play. Consumers with NFC-enabled Android devices will not be able to download the app for themselves and will only be able to obtain the mobile wallet on their phone by going to a carrier store. 

"Once [the SIM chip] is in the phone, you can use it anywhere," said one source. "So this is controlling the initial distribution to keep someone somewhere else (not in a test city) from accessing it and having a bad experience."

There's even a delay in the production of cases for iPhones that will allow those devices to make payments using NFC. That, however, isn't Isis' fault, an employee of Isis said. The cases were delayed due to the recent release of the iPhone 5, which, like the 4 and 4S models, does not support NFC — and which requires a slightly longer case than previous iterations. The cases should be available soon, but like the Android version, the iOS version of the Isis Mobile Wallet will not be immediately available for download through the iTunes store.

What Isis isn't

Regardless of whether the pilot programs in Salt Lake City and Austin eventually take off, some analysts doubt a distribution model involving customers getting their payment cards from their mobile provider will ever reach critical mass. 

"Isis still seems to believe that they still have a shot at direct-to-consumer," said Cherian Abraham, senior business consultant and leader of mobile payments and banking for Experian Global Consulting practice. Abraham said he doubts that Isis will stand a chance as a consumer brand next to the banks and recognizable brands it will enable in its mobile wallet — brands like Chase, CapitalOne and Amex.

"Let's see which among these four brands will truly resonate," Abraham said.

Isis shouldn't be reaching out to consumers at all, Abraham said, but instead focusing on the issuer. "Isis should be leveraging a platform play," he said, "one that leans on the combined marketing clout of these three massive issuers, and ride on their collective branding."

"What Isis should aim for is to have a CapitalOne Viking waltz into a store and hit the 'Pay with Isis' icon on his Capital One wallet," Abraham said referring to CapitalOne's marketing mascots. "That is their best route to fame and ubiquity."

UPDATE: A spokesperson for Isis sent Mobile Payments Today the following email clarifying the provisioning process for the mobile wallet once it begins to roll out (but not necessarily during the pilot program):

This is a two-part process. First, consumers can purchase or upgrade to a smartphone with Near Field Communications (NFC) technology at their AT&T Wireless, T-Mobile or Verizon Wireless retail store. Second, with the hardware in place, consumers can download the Isis Mobile Wallet from the app store and begin populating it with their credit or debit cards or load money on the Isis Cash Card. 

Consumers will be able to download the Isis Mobile Wallet just as they do any other app. Isis uses a combination of hardware and software features to protect consumers and their financial information.  

For more stories like this, visit the Carriers/Card Brands research center.

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User Comments – Give us your opinion!
  • R B
    48517734
    Isis should be looking at SubtleData (www.subtledata.com) to become a homogeneous play that doesn't solely rely on NFC. The idea that NFC is the linchpin means there is a single point of failure in the model.
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