Google Wallet Said To Put Pressure On Isis

Google Inc.’s new mobile payment system puts pressure on Isis, the wireless carrier-backed joint venture trying to develop a competing system.

“What … [Google Wallet] telegraphs to Isis is they’re going to have to radically accelerate what they’re doing … if they want to have a slice of this,” says Nick Holland, a senior analyst who covers mobile payments at Yankee Group.

AT&T Inc., T-Mobile USA and Verizon Wireless announced the formation of Isis in November. At the time it said it was working with payment network Discover Financial Services and the U.S. cards unit of Barclays PLC to develop a mobile wallet service that would let consumers use mobile phones with Near Field Communication technology to make payments at the point of sale (see story). It has since said it is open to working with other banks and payment networks (see story). It is planning to test the service in 2012 with the Utah Transit Authority but has not announced merchant partners yet (see story).

The Google Wallet service unveiled May 26 has many of the same elements as Isis, including partnerships with a bank, card network, wireless carrier and several merchants (see story).  Google is rolling its service out now in San Francisco and New York and plans to make it available nationwide this summer.

Google’s initial partners are Citigroup Inc., MasterCard Inc., Sprint Nextel Corp. [which carries the Nexus S, the only Android smartphone that includes an NFC chip] and several retailers.

A spokesperson for Isis says it would not comment on Google Wallet, but “we believe Isis is best equipped to provide the necessary scope and scale to move toward widespread consumer adoption of mobile commerce.”

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