Isis Phone Announcement is Latest Shot in Brewing Wallet War

The release yesterday by the Isis telco joint venture that six major phone makers “will introduce NFC-enabled mobile devices that implement Isis’ NFC and technology standards,” shouldn’t be taken as an endorsement by the phone makers.

After all, the Isis technology standards follow global standards, from such organizations as GlobalPlatform. Isis told me the standards at issue mainly spell out how banks and other service providers will provision their payment applications on secure elements in the Isis NFC phones.

So if the handset makers, among them Samsung, LG and Research in Motion, support global NFC technology standards, they could easily support the Isis technology specs, as well.

And all six handset makers, which also includes HTC, Motorola Mobility and Sony Ericsson, have already made known their plans to introduce standard NFC phones.

But it appears likely the real point of the Isis announcement was to send a message to the market that the Isis telcos, Verizon Wireless, AT&T and T-Mobile USA, plan to have a broad range of handsets available after they launch their Isis wallets next year.

They want to draw a distinction with the just-launched Google Wallet, which so far has support from only one handset, the Nexus S 4G.

As Isis chief technology officer Scott Mulloy put it in yesterday’s press release, “working together with the device makers and our founding mobile carriers, Isis can provide the consumer choice and scale necessary for widespread adoption of mobile commerce.”

Google and Sprint–the lone carrier partner signed up so far by Google–promise more handsets supporting the wallet. And it’s expected that at least some of those phones will come from Motorola Mobility, which Google is acquiring.

But the Isis telcos, which include the two largest U.S. carriers, Verizon and AT&T, appear to be in the driver’s seat in a budding wallet war with Google. They order the phones and control the distribution channels stateside. And they will be the ones discounting the prices for subscribers on high-end NFC-enabled smartphones in exchange for contracts.

Isis has pledged to be open and welcome other ecosystem players, so it could end up working with Google, as Isis representatives said the joint venture would be open to doing. Google would then have to pay a fee to get its wallet applications onto the secure elements of phones sold by the Isis carriers.

But the Isis operators also could take a more hard-line approach and block or at least make it difficult for Google to access the secure elements of the phones they order.

That is a distinct possibility.

In my discussions with European operators, the mention of the Google Wallet usually brings a frown to their faces. Google is seeking to deploy its wallet overseas, as well. But the European telcos, like the Isis carriers, are planning to introduce their own NFC wallets. And while Google has said it would work with operators to put the Google Wallet applications onto NFC-enabled SIM cards that the telcos issue, I suspect negotiations between Google and telcos are strained.

Google has options if operators were to try to lock it out. It could churn out more of its own Android phones with embedded secure chips that it would own, helped by its Motorola unit, assuming regulators approve the acquisition.

And it could roll out passive contactless stickers–as it’s already said it would do–along with such NFC bridge technologies as microSD cards, supporting the wallet. Google could even try to issue its own SIMs by becoming an MVNO, or mobile virtual network operator, which it is reportedly experimenting with in Spain.

And, of course, just as the Isis operators could try to discourage the Google wallet app from being downloaded to its phones, it seems unlikely that Google’s own NFC wallet phones would also sport an Isis wallet.

At this stage, the brewing wallet war between Isis and Google is more of a PR war, since Isis has not yet launched service, and the Google Wallet remains small–with only payment and no couponing or other Offers available yet.

Isis in July issued a press release announcing it had formed “relationships” with the four major U.S. payment networks, Visa, MasterCard, American Express and Discover Financial Services. Google came back earlier this month, proclaiming it also was “working” with the three other major payment schemes, in addition to its earlier partnership with MasterCard.

As with the Isis announcement Tuesday with the handset makers, the relationships between the payment networks and wallet providers are not close partnerships–though originally, Discover and Isis did work closely together, as have MasterCard and Google for the initial wallet launch.

Essentially, these working relationships with the payment networks mean that the networks will be open to offering the specs for their contactless applications for loading into either of the wallets. That is provided, of course, that the devices running the wallets and their secure elements are certified by the schemes.

Isis’ latest shot in the brewing wallet war–announcing that six of the top 10 handset makers worldwide are planning to introduce NFC phones implementing its specs–seems to have scored.

But unless they agree to work together, the two wallet platform purveyors, Isis and Google, will continue to spar for the hearts and minds of NFC ecosystem players–and one day consumers.

Article comments

angelicgoddess Jun 29 2012

Whooa, I think its really an efficient way.
'Like in Japan, people can already use their NFC-enabled smartphones to authorize bank transfers that pay for transit tickets, meals and even snacks from vending machines( wikipedia)'. I think definitely great! I am looking forward for it soon.


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