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Topic: Mobility

Can wireless carriers finally make mobile payments a reality?

Summary: AT&T, T-Mobile and Verizon Wireless have formed a joint venture designed to make mobile commerce a reality. The big question here is whether these wireless carriers can make mobile payments fly.

Larry Dignan

By for Between the Lines |

AT&T, T-Mobile and Verizon Wireless have formed a joint venture designed to make mobile commerce a reality.

The effort, dubbed ISIS, will focus on building a national mobile commerce network with an initial focus on point-of-sale purchases. In a nutshell, your smartphone will be used as a payment mechanism. ISIS will roll out service in the next 18 months.

According to the companies, Michael Abbott, a former executive at GE Capital, will be the CEO of the venture.

The big question here is whether these wireless carriers can make mobile payments fly. The U.S. is woefully behind the rest of the world on mobile payments. In a recent conversation with John Lutz, general manager of IBM's business process outsourcing unit, it was painfully clear how mobile commerce just stinks in the U.S. In Turkey, you can use a text message to get money from an ATM. Latin America has mobile commerce. So does Japan. Simply put, the idea of using a phone to pay for something isn't unique anywhere but the U.S.

Abbott said the idea behind ISIS is "to create a mobile wallet that ultimately eliminates the need for consumers to carry cash, credit and debit cards, reward cards, coupons, tickets and transit passes."

Sounds impressive, but ISIS will need payment networks on board. For now, ISIS is working with Discover Financial Services to develop the payment network. While Discover has more than 7 million merchant locations, it is the No. 3 payment network. ISIS will need Visa, Mastercard and American Express on board to really make the system work.

Topics: Mobility, Banking, Enterprise Software, Networking, Wi-Fi

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8 comments
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  • RE: Can wireless carriers finally make mobile payments a reality?

    Short answer, no. Largely in part most of the merchants do not follow their agreement they signed with the credit card processing companies by requiring minimum transaction amounts and making it difficult to only use non-cash payments (requiring ID as part of a non-age restricted sale is also prohibited, long as the cardholder presents a card in compliance [aka signed]). The credit card networks need to crack down on these merchants and force their hand or revoke their ability to accept credit cards. Reporting of violations by customers is slow, inefficient, and generally falls on deaf ears unless they get a lot of them.
    JT82
    Reply Vote

  • I'm sure the Wireless carriers want to be the sole conduit

    Our money flows through, and I can't think of any group <b>less</b> well-suited for it. Don't wireless carriers <i>get</i> that about the only consumer company consumers hate more than their credit card company is their wireless carrier? <br><br>The idea of AT&T, T-Mobile and Verizon Wireless conspiruh, collaborating <i>"to create a mobile wallet that ultimately eliminates the need for consumers to carry cash, credit and debit cards, reward cards, coupons, tickets and transit passes</i> is pretty chilling. Think about it, the carriers through this new company ISIS would then know where you go, how you got there, what you buy, where you buy it, how much you paid for it, who you talk to, and for how long. No potential for abuse <i>there</i>.
    matthew_maurice
    Reply Vote

  • This is already done outside the US

    In Scandinavia, and other select EU nations, and has been done for quite a while. The US is simply behind. Including on Internet connectivity. But, the Large CORPORATIONS (White, Republican) don't want to spend the money to upgrade their infrastructure (sounds a bit like our country in general, eh? Nah, they'd rather have the profits for themselves and send the jobs overseas.

    You can pay for multiple things just by waving the phone in front of a scanner, and it charges direct to your CC.

    Security probably isn't as much of a concern there, because people, from what I have heard, are just generally more trustworthy.

    See what happens when people work together, and, generally, aren't closed-minded, ignorant fools?
    maclovin
    Reply Vote

  • This is already done outside the US

    My initial message was reported as spam, yay.

    or not..... whatever.
    maclovin
    Reply Vote

  • RE: Can wireless carriers finally make mobile payments a reality?

    Its cool technology, and has been available in many African emergent economies for a while. Here in Dublin, where we are in the process of moving the other way, I can pay my parking meter via my mobile phone
    Laurence Cuffe
    Reply Vote

  • RE: Can wireless carriers finally make mobile payments a reality?

    How will this affect CC fraud and identity theft?

    Now you don't have to nick someone's wallet to pass yourself off as them, you can just clone their phone. I haven't heard many reports of advances against SIM cloning lately....
    dcnblues
    Reply Vote

  • Congrats to the countries that do this

    Call me old fashioned at the ripe age of 24, but I for one do NOT want my phone paying for anything. Cash, check, debit card with a big fat "REQUEST ID" on the back.

    I've had phones stolen, broken, and lost too much to want them replacing my wallet.

    @maclovin:
    I guess I fit your demographic because I'm white and republican, but I'd rather my cell carrier take care of some other things first: like better bandwidth, a service plan that doesn't bake in the cost of a subsidized handset, SMS blocking, and a "bill threshold", before they start adding payment options into the mix.

    Joey
    voyager529
    Reply Vote

  • RE: Can wireless carriers finally make mobile payments a reality?

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    birumut
    Reply Vote
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