Isis Finds Tech, Seeks Banks

Isis and Google are both vigorously bulking up on innovation to turn leather consumer wallets into digital ones, but they have their work cut out for them. As in a lot of new and alternative financial services ventures, integration with traditional banks will be the most elusive, and most necessary, step to success.

"We've seen this with bill pay and [personal financial management]. I believe for any solution to work, it's going to have to be integrated with mobile banking offerings," says Brad Strothkamp, a vice president and principal analyst for Forrester Research.

Isis, a telecom consortium that hopes to build a mobile payments market, recently licensed mobile technology from software company C-SAM to help it build loyalty programs, coupons and other staples of near-field communication payment initiatives. The consortium has said it hopes to lure acquiring banks to make the service available in mobile banking. A step on the way to that goal, its deal with C-SAM, will allow Isis to "build a secure transaction ecosystem and offer consumers a comprehensive mobile wallet for conducting payments, redeeming offers and storing loyalty cards," says Jayme Johnson, head of marketing for Isis.

Strothkamp, who says a winning model that drives mobile payments has still not emerged, says requiring consumers to maintain separate apps and authentication for mobile payments and mobile banking is a hindrance to consumer adoption. Mobile payment sites that directly link to mobile banking platforms, which can leverage existing relationships, stand a better chance of achieving uptake. "Mobile banking is one of the main apps that you'll have on your phone. Why would you not want [payments] to be a part of mobile banking?"

Isis has already successfully reached out to card networks, and has said it's interested in working with banks. After initially positioning itself as a competitor, the consortium recently opened its model to the networks, and has inked deals with Visa, MasterCard and American Express. Isis hopes consumers will make payments using NFC phones, which will be waved near terminals, transferring payment information and other data, which could be used for loyalty programs, coupons or targeted marketing.

Isis is getting ready for its debut in Salt Lake City and Austin in a few months. Time is of the essence, since competitors such as Google Wallet are also moving quickly to use NFC to build a mobile payments ecosystem.

Google, whose partners include MasterCard, Sprint and Citigroup, is testing mobile payments this summer in San Francisco and New York. Google has also enhanced its mobile payments capabilities with its intention to purchase Motorola Mobility.

"Isis needs mobile wallet software that manages how things happen within the wallet, how different parts can be loaded and how consumers choose which card to use for payments," says Zil Bareisis, a senior analyst for Celent.Google has entered into a deal in which First Data will power parts of its Google Wallet through First Data's Trusted Service Manager technology, Bareisis notes. "None of that would be the core competency of a telecom operator."

Isis hopes the C-SAM deal will allow it to scale quickly. C-SAM, which provides coverage across a number of carrier networks, operating systems and NFC handsets, bundles more than two dozen payment services within its software development kit, such as coupons, parking and health care.

C-SAM has operations in the U.S., Asia, Latin America and other markets. The tech firm's security and platform architecture enables providers to configure different trust models and aggregate applications from disparate domains without changing the issuer or provider's risk-management practices.

The platform and software development kit were built over the past 12 years, and have earned C-SAM 11 patents for a range of mobile transaction technology functions. Under the licensing deal, Isis participants can use these tools to build and deploy transaction widgets enabling various types of payments — and ancillary services tied to payments.

In a statement to BTN, C-SAM said its "platform and development work with Isis will allow the Isis wallet to be deployed across a full range of handsets, will enable and power a broad range of mobile commerce use cases and value added services, and will support the full range of security and risk-management protocols of Isis' other partners and back-end providers."