Can wireless carriers finally make mobile payments a reality?

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.