Isis Ends Plans to Launch Its Own Retail Payment Network

The Isis joint venture has confirmed it is abandoning plans to launch its own payment network and will instead work with Visa Inc., MasterCard Worldwide and other established payment brands for its NFC rollouts.

Head of marketing Jaymee Johnson told NFC Times that Isis, the joint venture formed by major U.S. carriers AT&T, Verizon Wireless and T-Mobile USA, will enable NFC-based mobile wallets from the telcos to store credit, debit or prepaid card accounts branded with the major established card networks, along with other mobile-commerce applications.

That confirmed reports earlier that Isis had pulled the plug on efforts to compete with Visa and MasterCard in establishing its own Isis brand at the retail point-of-sale. It had planned to enable subscribers to tap their phones to pay with an Isis contactless application stored in their NFC phones. Isis has a partnership with Discover Financial Services to build Isis on Discover’s retail network.

But Johnson refused to characterize the change of plans as a defeat, calling it instead an “opportunity” to accelerate the rollout of NFC and other mobile-commerce services.

“It is not in any way a deceleration,” he told NFC Times, taking issue with a Wall Street Journal article, which he said left a “completely false impression” that Isis was “dialing back” its project.

“It is an acceleration,” he said. “We can go bigger and broader, with more breadth and faster,” adding that mobile payment for Isis was always a means to an end.

“That end is really, in general, the widespread adoption of mobile commerce,” he said.

Isis last month announced it would open up to other payment networks, he noted. It had earlier said it would open its wallets to other banks and service providers. Besides Discover, the joint venture had announced an agreement with small issuer Barclaycard US to issue Isis-brand payment.

But most observers see the new strategy as a concession by Isis that it was in for a very tough slog in trying to establish a new payment scheme against giants Visa and MasterCard.

At the same time, the Isis telcos have gotten an unexpected challenge from Google, which is building its own NFC-based mobile-commerce network while working with established players, such as Citigroup and MasterCard.

And No. 3 U.S. mobile operator Sprint, which was originally part of the Isis group, last month confirmed plans to launch its own NFC-based mobile wallet and is inviting established players in.

Even though AT&T, Verizon and T-Mobile USA together offer a pool of more than 200 million subscribers, they found it rough going signing up merchants to accept their brand.

Since announcing the joint venture in November, Isis had yet to release names of any new issuers or, more importantly, to disclose any deals with major retail chains.

“The challenge, no matter what they do with this, whether it’s a network or software, with a wallet, they have to get something together that is compelling for merchants,” consultant Todd Ablowitz, president of U.S.-based Double Diamond Group, told NFC Times. But some merchants have told Ablowitz that what Isis was offering them was not compelling enough compared with the fees they would be charged. 

Johnson said Isis’ results in signing up merchants was not the “motivating factor,” in ending plans for an Isis payment brand. “While it’s true we did not announce any merchants, we were and are developing solid traction with them.”

He declined to name any of the retail chains that had signed up, however.

Isis had planned to collect transaction fees from merchants. That is no longer expected to be a source of revenue for the telcos, though it's possible they could strike deals with banks and payment brands to take a small slice.

Johnson told NFC Times the Isis telcos plan to earn revenue by charging fees from banks and other service providers whose applications they host on the NFC phones. That would include revenue from renting space on mobile operators' SIM cards.

Isis and the telcos also will seek to charge fees from merchants for the delivery or redemption of coupons and customized offers to consumers, he said.

He said Isis has received strong interest from big U.S. banks and the largest card networks to participate, though he declined to name them. Citi is reported to be interested, among some other banks. Visa and MasterCard are also involved in talks.

Meanwhile, a battle is looming for the telcos with the likes of Google and NFC smartphone makers, which are expected to try to keep control of embedded secure chips in NFC phones. These chips, like SIM cards, can store payment and other secure applications.

“Handset distribution is through the carriers' channel, and they are going to have a definite point of view around secure element location and control,” Johnson told NFC Times. “When the situation gets to that point, I’m not sure how much friction there will be.”

Johnson said plans are still on for Isis’ first NFC pilot in Salt Lake City, Utah, in the first half of 2012. NFC Times has reported Isis plans a second trial in Austin, Texas.

HEADLINE NEWS

Budding MaaS App Hits Milestone for Public Transit Tickets but Share of Total Rides Still Low

NFC TIMES Exclusive Insight – U.S.-based trip-planning app Transit announced it has enabled 500,000 rides from its app for a group of 13 small to mid-tier transit agencies based in the state of Ohio, though mobile ticketing still makes up a small percentage of total rides provided by the agencies.

Insight: Apple Pay Launch of Virtual Closed-Loop Virtual Clipper Card Follows Emerging Trend

NFC Times Exclusive Insight – Although the trend for transit agencies to support open-loop fare payments, including with Apple Pay, Google Pay and other Pays wallets, has continued unabated–even accelerated–during the pandemic, another trend is taking shape: That of agencies adding virtual versions of their closed-loop fare cards into the Pays wallets.

First Transit Agency to Sell Tickets Through Uber App Sees Relatively Few Takers Two Years on

Apr 21 2021

NFC TIMES Exclusive Insight – The Regional Transportation District of Denver was the first transit agency to work with Uber to sell its bus and light rail tickets through the Uber app in the spring of 2019. RTD later that year expanded the service to trip-planning app Transit and then last fall to the app for another ride-hailing service, Lyft.

Sydney to Test Multimodal Payments Involving Private Mobility Providers Using Digital Closed-Loop Card

NFC Times Exclusive Insight – A trial to be held later this year in Australia’s largest city, Sydney, if it proves successful, could offer one example for how agencies can encourage customers to take multimodal transport combining public and private operators. The economics behind the New South Wales government’s trial offer are unclear, however.

Rome Transit Operator: Covid Accelerates Demand for Contactless Payments but Customer Habits Hard to Change

NFC TIMES Exclusive Insight – The CIO of Italy’s largest public transit operator, ATAC SpA, said the Covid-19 pandemic has accelerated demand for open-loop contactless and mobile payments, but added that old habits are hard to break for customers and use of cash and paper tickets are still popular.

Dubai Transit Authority Plans to Launch Its Closed-Loop Card in More NFC Wallets

NFC TIMES Exclusive Insight – Dubai’s Roads and Transport Authority, or RTA, which in December first launched mobile fare payments with a digital version of its closed-loop card in Huawei smartphones, says it plans to expand the service to other OEMs, including Apple and Samsung.

Case Study: Transit Agency in Portugal Combined NFC with BLE for Mobile Ticketing; Faced Challenges

NFC TIMES Exclusive Insight – The agency that runs ticketing for 19 public bus, tram and train operators serving Porto, Portugal’s second largest city, says it has had success–and faced several challenges–with the rollout of its Anda mobile-ticketing app.

OMNY Hits New Usage Milestone as Open-Loop Payments Rollout Continues

NFC TIMES Exclusive Insight – New York’s Metropolitan Transportation Authority, or MTA, says it continues to see steady growth of its open-loop fare payments service, OMNY, announcing 50 million taps by customers using NFC wallets and bank cards to ride the massive New York City Subway and the city’s buses.

In-Depth: Contactless Open-Loop Pilot in Spain First Project from Vendor Partnership

Mar 11 2021

NFC TIMES Exclusive Insight – Bilbobus, which operates bus service for the city of Bilbao, in northern Spain’s Basque region, says it launched its recent trial of con

Moscow Metro Plans Rollout of ‘Face Pay’ Technology for Fare Collection

NFC TIMES Exclusive Insight – The Moscow Metro plans to roll out facial-recognition technology at every station by the end of 2021 to enable customers to pay fares, officials say. The project, while delayed, would be the largest of its kind globally.

Stockholm Transit Agency Launches Open-Loop Fare Payments for Multimodal Rides

NFC TIMES Exclusive Insight – Stockholm Public Transport, or SL, the city-owned company that oversees major public transport in the city, is the latest agency in Europe to launch open-loop fare collection, offering multimodal rides with a tap of a contactless EMV bank card or NFC device.

Case Study: Amsterdam Transit Operator Seeks to Go Nearly 100% Digital for Ticketing to Cut Costs and Enhance Service

NFC TIMES Exclusive Insight – GVB, Amsterdam’s largest public transit operator, says it seeks to replace an aging closed-loop fare card system and go to open-loop and other digital tokens with the planned rollout of its new account-based ticketing system.