Isis Tiptoes Into Chilly Mobile Payments Water
If they build mobile payments systems, will consumers come? The answer apparently is maybe, and the plurality of systems is likely one reason consumer reaction is in doubt. The latest entry, Isis, is the darling of three of the top four wireless carriers, but it is rolling out in just two cities, where customers owning particular handsets will be able to use Isis only with certain merchants.
Isis, a joint venture of AT&T, T-Mobile and Verizon, has debuted its long-awaited mobile wallet initiative in Austin and Salt Lake City.
It joins a number of other initiatives -- Square and Google Wallet, to cite just two examples -- competing in the nascent mobile payments industry. Whether Isis will gain more traction than they have, however, remains to be seen.
A Multi-Step Process
Consumers who want to try out Isis must first get a secure element SIM, which is available in the three mobile service providers' stores in the two cities. The SIM works with 11 handsets.
Then, they must download the Isis Mobile Wallet application from Google Play. They can load an eligible American Express, Capital One or Chase credit card into the Isis Mobile Wallet or use an Isis cash card.
There are hundreds of retailers where Isis can be used, including 7-Eleven, Rite Aid, McDonald's, Petco and Jamba Juice.
An Isis spokesperson was not immediately available to provide further details.
Multiple Initiatives, Multiple Confusion
In theory, the concept of mobile payments is a winner. Mobile phones have become as ubiquitous as actual wallets, and few people leave the house without either in their possession.
There are some challenges, of course -- security being one and the number of competing providers, another. With its telco pedigree, Isis has a leg up in that consumers may feel safer with providers they are already using.
Leaving the issue of security aside, there is also the matter of adoption -- and not only by consumers. Merchants must invest in the necessary equipment and back-end infrastructure tweaks to support many of these initiatives -- but not all of them, as Square as shown.
The assorted companies and providers that make up this industry -- a group that includes technology companies, handset manufacturers and financial service companies, among others -- are not blind to these issues.
In August, the Electronic Transactions Association debuted the Mobile Payments Committee. Members include most of the players in the mobile payments space, including competitors. The group's goals are to address these very issues, including educating both merchants and consumers about the benefits of mobile payments.
How Do Consumers Really Feel?
Consumers appear ready to jump on board the mobile payments bandwagon, but they may not be willing to deal with the hassles of a fragmented industry.
"Customers want a standardized mobile payments system to take the cards and cash stuffed in their wallets and pocketbooks to their phones," Rich Hanley, associate professor and director of the graduate journalism program at Quinnipiac University, told the E-Commerce Times.
"Isis is a step in that direction, but a cashless consumer payments and awards system remains fragmented across several competing companies," he said.
Until a universal standardized mobile payments architecture has been deployed across all handsets, credit card purveyors and merchants, Hanley predicted, mobile payments will remain a niche technology.
There is also a hype issue that has consumers wary, said Daryl Colwell, vice president of MediaWhiz.
Mobile payments is still a strange, confusing world for the average consumer, he told the E-Commerce Times.
Nor are the providers helping; many of these solutions are still not easy to use or comprehensive enough to be worthwhile, Colwell said.
"To get people to turn their smartphones into powerful e-commerce-meets-direct-marketing tools, companies need to think of the point-of-sale value proposition," he said. "That requires an intuitive payment process that delivers instant, targeted coupons and deals based on purchase patterns, location and advocacy opportunities built around social media."
Retailers need to flood these applications with deals, coupons and one-time offers to entice consumers, suggested Colwell. "Think instant coupons, in-store discounts or other offers that help trigger last-minute purchases."