Bank skepticism of the Isis mobile payments joint venture was high when the wireless carriers leading the initiative announced its formation last fall, but Isis says it has calmed early suspicions and now is working closely with major banks and payments companies.
When Isis first was announced, it had just two financial-institution partners on board–issuer Barclays PLC and card network Discover Financial Services (
But as the venture gears up for its first major test in Utah (
“We sort of find ourselves in a conversation where the banks are saying, ‘We understand the legitimacy of what you guys are up to; we see the commitment from the carriers,’ and there’s a feeling of inevitability about this,” Ryan Hughes Isis chief marketing officer, said in an interview last week.
Hughes declined to name banks Isis has met with or to say whether any have indicated they would enable their customers to load their credit and debit card data into the mobile-wallet service the joint venture is developing.
Isis is a venture between AT&T Inc., T-Mobile USA and Verizon Wireless. When the carriers first announced the service in November, they pitched it as an alternative network of sorts to Visa Inc., MasterCard Worldwide and American Express Co. The plan was to issue Isis-branded payment accounts through Barclaycard, a subsidiary of Barclays PLC, and route transactions over Discover’s payment network.
Bank of America Corp., JPMorgan Chase & Co. and Wells Fargo & Co., three of the largest credit and debit card issuers that are involved in their own mobile-payments trials, declined to comment about Isis. Visa and MasterCard also declined to comment.
Hughes also would not name the merchants Isis has talked with but said the organization’s goal is to help facilitate loyalty, coupon and other services to enhance basic transactions for merchants and their customers.
Hughes stressed that Isis is taking an “open” approach to working with multiple banks and payment networks, but payments consultant Richard Crone is skeptical about whether many banks will bite.
“The bankers have seen this movie before,” Crone says. “It’s the adoption of a new intermediary.”
Isis plans to offer default payment accounts to customers that do not have accounts with its bank partners, but Crone says he doubts banks would allow their customers’ payment credentials to be loaded into Isis’ mobile-wallet service.
Many banks are testing mobile-payment services using external memory cards that contain a consumer’s payment information and a Near Field Communication antenna and plug into existing handsets. But ultimately Isis, which will rely on mobile phones with a built-in NFC chip, will provide a more-robust experience for consumers, banks and merchants, Hughes said.
Concerns over who ultimately owns the a customer relationship in a carrier-led service likely will remain for banks, but Charles Golvin, a principal analyst with Forrester Research Inc., says he expects banks “will come to the table and make peace with this.”
“I don’t know what the straw is that breaks the camel’s back, if you will,” but “seeing the operators move with the payment capability on mobile phones” alongside any consumer adoption could help bring banks to the table, Golvin says.
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