NFC Times Premium Content (Free): The Isis joint venture and member mobile operators officially launched their Isis Mobile Wallet today, with the new Android wallet app now available for subscribers of all three Isis telcos and NFC SIMs in thousands of carrier shops.

The announcement of the expected launch today offered few surprises, with no new issuers disclosing support for the Isis wallet beyond the two large financial institutions, American Express and JPMorgan Chase Bank, which are already onboard for the rollout. Isis had announced plans for the national rollout in late July, and AmEx and Chase announced they were participating in August. 

Also missing today was any word on new national retail chains supporting Isis’ mobile-commerce platform or when telcos would introduce the wallet for the iPhone with a special attachment. Moreover, there was no word yet on how the Isis operators, Verizon Wireless, AT&T and T-Mobile USA along with the participating issuers and retailers plan to undertake the massive task of promoting the mobile-commerce service nationwide to build awareness among consumers. 

“All of them have their own plans, which right now I don't think they've been made public, so it will vary on that sort of partner by partner basis,” Jaymee Johnson, head of marketing for Isis, told NFC Times. 

He also said there would be more issuers and merchants joining the program. Merchants Jamba Juice, a fast-food and specialty drink chain with about 750 locations in 26 states; along with Coca-Cola vending machines nationwide, have signed on. Johnson also confirmed that toy store chain Toys“R”Us would also accept offers, such as coupons, as part of the Isis mobile-commerce platform.

That platform includes enabling users to tap to pay and redeem offers and rewards in one tap, which Isis calls SmartTap. Specially equipped terminals are required. There are hundreds of thousands of POS terminals in place nationwide that can accept payment only from the Isis and open-loop contactless applications on cards and in other NFC wallets.

“There is more to come,” Johnson said. “We don't have anything more today, but certainly I think the more general frame that I would give is it's going to be an ongoing drumbeat from here to the next year. As we gain momentum, with more issuers and more merchant partners, you're going to hear one after another after another after another, and I think we will have fewer of these sort of big singular launch events.” 

Still, the challenges are many for Isis, not the least of which is signing up more merchants to support the wallet and Isis offers, as well as loyalty rewards. And that is one of the main reasons it’s likely that it will be well into 2014 before Isis gets rolling, say observers. 

Isis declines to release how many active point-of-sale terminals in the field support SmartTap software, though Isis has announced all major POS hardware vendors are supporting it in the U.S. for their contactless terminals. 

The merchant piece is a key part of Isis’ business model, since the joint venture will receive fees either for delivering offers and enabling rewards or for enabling the redemption of offers and rewards or both. 

That is in addition to SIM rental fees Isis will charge financial institutions and perhaps other service providers to host and manage their payment applications on its SIMs. 

Competition MCX, Sprint...and HCE
Capitol One, which along with American Express and Chase had participated in the two-city Isis trial in Austin, Texas, and Salt Lake City, Utah, is believed to have declined to sign up for the national rollout in part because of the fees Isis planned to charge. Capital One is believed to be investigating host-card emulation, which would enable payments, along with other applications, on NFC phones using contactless card terminals in the field, but without the need for a secure element. 

Google announced support for host-card emulation, or HCE, in its latest version of Android, 4.4. While HCE is not even close to being standardized, and there are no certification programs in place from the payment schemes, such as Visa and MasterCard Worldwide, the development creates yet another headache for Isis. 

The joint venture is already dealing with the prospect of strong competition from a group of large merchants, in the Merchant Customer Exchange, or MCX, which is planning to launch their own mobile-payment and commerce platform. MCX merchants, which include some of the largest chains in the U.S., such as Wal-Mart, Target and Best Buy, would have little incentive to work with Isis and may have an exclusivity clause to work with MCX. MCX plans to use QR codes to enable payments and probably other mobile-commerce applications, though could support other technologies later. 

No. 3 Carrier Sprint has launched its own NFC-enabled platform, Pinsight Touch, which it has positioned as a more “open” alternative to Isis for secure applications stored on secure elements. And there are other mobile-payment services gearing up in the U.S., including from PayPal. 

For Verizon and other Isis telcos, long accused of blocking the Google Wallet from using the embedded chips on Android phones the telcos sell, the Google gambit with HCE might have a special sting. Isis is no doubt fielding questions from issuers asking why they need to pay SIM rental fees to Isis if they could potentially enable payments using HCE. 

“I think that in this point in time, we are still evaluating it (HCE),” Isis’ Johnson said. “It's too early to really have a perspective, yet. We continue to be in close contact and dialog with our partners from the payment networks, the other issuers (and) merchants. We do sort of diagnose the news to understand what it means.” He added: “Ultimately, the payment networks are really in the driver's seat on this one.” 

The Isis project has been perhaps five years in the making counting discussions among the telcos, which originally included Sprint. Sprint dropped out in 2010, and the three remaining telcos formed a joint venture, JVL Ventures, that year. It launched its two-city trial in October 2012, and has been gearing up for the national launch for months. That includes much work on testing, certification of handsets and NFC SIMs. 

The telcos have a combined 40 NFC-enabled Android models that are “Isis ready.” In announcements today from Verizon and AT&T, the two telcos said they had 15 and 19 Android models available, respectively, that could support Isis. They would include some of the same models customized for the respective carriers. T-Mobile USA didn’t announce the Isis launch today. 

The three carriers plan to package new Isis ready phones with NFC SIM cards for subscribers. Customers who already have an NFC Isis phone, they can get a free NFC SIM from their carrier. 

Verizon noted in its announcement today that customers would get $10 when they downloaded the Isis Mobile Wallet and activating a new American Express Serve account, as well as getting another $10 after their first tap-to-pay transaction at a Verizon Wireless location. 

Serve is a prepaid account that users can fund from their credit, debit or bank accounts and can use to pay for purchases with NFC or pay bills online and transfer funds to friends. Isis had supported a prepaid account, Isis Cash, with fewer features for the trial, which supported Visa payWave. Other AmEx and Chase cards are available for download to the new wallet. 

As another incentive to get consumers to use the wallet, Isis said users can get 20% back every time they tap to pay with the Serve account through the end of January, for a maximum of $200 in statement credits.

Verizon was the last of the three Isis operators to put version 2.0 of the Isis Mobile Wallet on Google Play, making it live only yesterday. AT&T and T-Mobile had it available earlier. Today's launch announcement probably waited for Verizon to make the new wallet available. The wallet app's user interface is designed to be simpler and cleaner for users. Isis’ Johnson chalked the later launch of the wallet by Verizon to staging and coordination issuers. “You're talking about not just thousands of retail stores but tens of thousands of retail carrier reps.” 

He denied there were delays in release of the iPhone case because of problems with the wallet software or any hardware issues. 

“Android has always been the lead platform and will continue to be so, as it is today, but to characterize the iPhone as delayed is not accurate,” he told NFC Times.