Evan Schuman's StorefrontBacktalk

ISIS has finally named retailers for its mobile-wallet trial this summer in Salt Lake City and Austin. On Tuesday (May 15), the mobile-operator consortium announced that some (but not necessarily all) area Macy’s, Dillard’s, Foot Locker, Champs Sports, Aeropostale and Jamba Juice stores will be accepting mobile payments during the ISIS trial, along with 19 local merchants in Austin and 29 more in Salt Lake City.

That’s not a bad turnout for a normal technology trial. But ISIS is promising just hundreds of locations in cities with a total population of nearly a million—and considering the weak consumer response so far to mobile wallets, anything less than an overwhelming assault may already be doomed.

The trial, which was originally announced a year ago, still lacks an official start date, though it’s reportedly going to begin in July. As recently as February, ISIS was aiming for at least 1,000 merchants in each of the two cities, according to unnamed ISIS representatives who talked to Digital Transactions magazine.

Instead, the trial will apparently launch with a few national chains participating, plus local bookstores, restaurants, an auto dealership group, a transit system and even a country club. That’s a good mix, but a far cry from the scale ISIS was pitching to local retailers just a few months ago. And whether ISIS will reach its target of 100 million impressions is very much in doubt.

Four of the national chains involved in the ISIS trial—Macy’s, Foot Locker, Champs Sports and Jamba Juice—are working with Google Wallet, too. That’s actually good news, because it means the ISIS trial will also be a test of how well the two systems can coexist on the same POS system.

Macy’s spokesperson Robin Reibel confirmed that its POS system required “some integration work” to support ISIS, “but it was not substantial.” Both systems will use the same PIN pad, Reibel said.

Even with the limited number of stores actively involved in this two-city trial, ISIS has a decent shot of doing at least as well as Google Wallet and PayPal mobile trials have gone, which is to say not very well.

PayPal’s mobile trial is only happening with one retailer: Home Depot. Even eBay CEO John Donahoe is conceding that very few actual Home Depot customers have been using the PayPal service. “Frankly, the only people using it thus far are eBay and Home Depot employees and others that have happened to have seen it,” he said. Donahoe added that he is hoping that changes this summer, when he is hoping for a marketing push.

All indications are that Google Wallet is faring almost as weakly. One of the first batch of retailers to try Google Wallet was Guess, and Guess CIO Michael Relich in January estimated that only “five or six” customers had actually used it at his chain.

There are many reasons for the lackluster consumer usage of the mobile wallets, and there’s no reason to believe that ISIS will be spared. Beyond the most prominent issues—few phones that support it, virtually non-existent consumer incentives, virtually non-existent retail efforts to promote it—there’s also the fact that Apple has yet to join. There’s a very strong theoretical argument as to why Apple might do a lot better than the existing players, and its absence is preventing iPhone users from participating.

The nature of iPhone users is such that technical experimentation is strong, so the absence of that group is significant. In a Peapod trial this month, for example, the grocery firm found that when it rolled out the program for iPhone and Android users, 90 percent of the participants were using iPhones.

There’s also the fact that this small market is being fragmented, with card brands Visa and MasterCard each offering its own mobile wallet service.

And although all of those factors are certainly not helping mobile wallet efforts, the biggest problem is the exact same issue that has kept contactless payment cards from getting anywhere. Namely, the lack of any coherent and tangible benefits to consumers.

Some of this is certainly chicken-and-egg issues, with the benefits of the mobile wallets happening at the end of a successful rollout. That’s when consumers can have all of their payment cards, giftcards, loyalty cards, stored value cards and even cash from bank accounts neatly stored within their phones. And that’s when retailers can have virtually all of their customers able to use mobile wallets to handle their transactions.

Look at any of the pitches for almost any of these wallets and the incentives are pretty much, “think how wonderful it will be, everyone and everything is using this.” That’s fine, but what about incentives for the initial users? That’s the chicken-and-egg mess. For consumers to even consider using a mobile wallet, it has to be available to them and available for us at many—if not most—of the places they shop. For that, you need the phones, maybe the carriers and definitely the retailers. And none of those players—especially the retailers—will put any serious muscle behind this until sufficient consumer activity is demonstrated. Both sides are waiting for the other.

ISIS has been touting this two-city trial for a long time, but the argument has been that it would saturate the cities. If done that way, it would actually be a microcosm of what the country would be like with a successful mobile wallet. But what ISIS is delivering is far from saturation. Just more than 50 retail brands, only six of which are national chains, with not even all local stores in those chains participating, in cities with a total population of nearly a million?

We’ve been waiting for more than a year to see that. It looks like, when this trial finally arrives, we’ll still be waiting.