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With Mobile Money, Does Scale Beat Speed? ISIS Hopes So

Written by Frank Hayes
July 21st, 2011

ISIS is all about scale. That seems to be the message from the mobile-payments consortium backed by AT&T, Verizon and T-Mobile, which on Tuesday (July 19) announced that it has cut deals with Visa, MasterCard and American Express for its mobile wallet trials next summer in Salt Lake City and Austin. Unfortunately for ISIS, it’s up against Google, which starts testing its own mobile wallet this September with a dozen big retailers in five major cities. That’s a whole different type of scale.

True, having the four biggest U.S. payment-card brands on board (Discover has been with ISIS from the start) should indeed give ISIS all the scale it needs to set up a very large mobile-payments system. Adding lots of card-issuing banks is next on the to-do list, according to an ISIS spokesman. But all that scaled-up payment infrastructure won’t do ISIS much good until it can scale up its appeal to retailers and customers—and then convince them that ISIS’ coupons-and-loyalty-cards mobile wallet is worth waiting for, especially when Google will have almost a year’s head start for something that sounds remarkably similar.

The difference, of course, is that scale. “If you think meaningfully about the scale that ISIS is bringing, overwhelming consumer scale, the ability to touch 75 percent of consumers, with multiple handsets, multiple OEMs, multiple operating systems, with meaningfully multiple issuers, that mix is setting up to be much more of a full commercialization and much less of a beta of an initial product,” said Jaymee Johnson, the head of marketing for ISIS.

“I don’t know exactly what Google will do. They’ve announced one handset from one carrier with one payment instrument,” he said.

That clash of approaches pretty much sums up ISIS and Google. ISIS is planning for a mobile-payments rollout that will be designed to operate on a massive scale—but won’t start its first trial before next summer at the earliest. Google has lined up Sprint (the mobile carrier that decided not to join ISIS), MasterCard, Citi and First Data, stringing together just enough pieces to form a payment loop—but its trial starts in September.

Google has also lined up more than a dozen major retailers, including Macy’s, Walgreens, Subway and Guess, along with the four leading POS PIN pad makers. It looks for all the world like Google is starting in the store and working its way out. ISIS, on the other hand, is pretty sure the POS won’t be a problem once the payment infrastructure is in place. Any retailer that can currently accept contactless payments will be able to handle ISIS payments. Loyalty cards, mobile coupons and other advanced functions? “That will require a software upgrade,” Johnson said.

If these two could somehow meet in the middle, they might actually be able to deliver something.


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