Digital Mobile

New mobile payment system backed by carriers to launch in U.S. in September

Aug 29, 2012 3:28 am

Skift Take

The carrier-agnostic NFC phones have one big advantage over competitors like Google Wallet: The carriers get to call the shots as to whether they’ll be included on their devices.

— Jason Clampet

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Isis, the mobile-payment joint venture backed by AT&T Inc., Verizon Wireless and T-Mobile USA Inc., is on track for a debut in September, following months of delays and a change in strategy last year.

VeriFone Systems Inc., a maker of payment terminals that is working on the project, is preparing for an introduction in Salt Lake City and Austin, Texas, next month, Chief Executive Officer Doug Bergeron said in an interview.

Isis, which will let users pay for items at stores using their mobile phones, had previously planned to roll out the service in the first half of 2012. The joint venture tweaked its strategy last year, opting to use credit-card companies to handle transactions rather than the carriers themselves, and it’s taken time to ensure that payments can be made securely.

“The focus has been: Get it right, make sure it’s secure,” Brad Duea, senior vice president of product management at T-Mobile USA, said in an interview.

Isis joins a growing cast of competitors, including Google Inc. and EBay Inc., in vying to capitalize on mobile-payment transactions, which Juniper Research Ltd. expects to rise almost fourfold in total volume to more than $1.3 trillion by 2017. The payment system relies on near field communication, or NFC, a technology that lets users tap a phone on a cash register to make a payment.

Security Measures

The approach requires carriers to sell NFC-equipped phones, which aren’t widely available today. While T-Mobile currently carries four NFC-enabled handsets, it will roll out “many more” this year, Duea said.

The NFC phones also will provide additional security, letting carriers remotely erase a device’s information if stolen. That type of feature isn’t offered by many other providers of so-called mobile wallets, Duea said.

T-Mobile plans to use NFC technology to provide other services, such as the ability to download applications and content by tapping a phone against a receptor at a store or concert venue, Duea said.

Laurel Cifala, a spokeswoman for the Isis venture, declined to elaborate on the service’s rollout beyond saying it would be this summer, which officially ends Sept. 21. Verizon Wireless and AT&T also declined to discuss details.

Even with the delays, Isis may have a better shot at success than mobile-wallet competitors because it has the backing of carriers. Google Wallet, meanwhile, hasn’t caught on with consumers, said Maribel Lopez, an analyst at Lopez Research LLC in San Francisco. Shari Yoder Doherty, a spokeswoman for Google, didn’t immediately respond to a request for comment.

“The carrier platform with Isis has more of an opportunity for success than some of the others, and at least more than Google Wallet has demonstrated so far,” Lopez said.

Editor: Reed Stevenson, Nick Turner To contact the reporters on this story: Olga Kharif in Portland at okharif@bloomberg.net; Scott Moritz in New York at smoritz6@bloomberg.net. To contact the editors responsible for this story: Tom Giles at tgiles5@bloomberg.net; Nick Turner at nturner7@bloomberg.net

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