When ISIS first emerged on the scene, everyone thought that it would be the next big thing (me included!). The promises that it made were intriguing to say the least- they proposed that by uniting players from all parts of the value chain in mobile payments, they would be able to launch the first E2E mobile payment solution by EOY 2011.
- ISIS is trying to keep the momentum going by encouraging others to play nice with them and openly encouraging Apple, Google and Sprint to join the network but that didn't seem to work out so well since Sprint has announced that they're partnering to form their own mobile payment network
- But why? The reasons are hard to see, but AT&T claims that the new debit card regulations forced ISIS and its partners to overhaul their plans because the Durbin amendment makes payment processing far less profitable by limiting the fees that merchants need to pay when customers make purchases. The industry has whole-heartedly agreed, but I wonder if its just that they need a sacrificial lamb to ensure that the Durbin debate continues. The Dodd-Frank bill actually has many in a tizzy because it expects to slash debit processing fee revenue from $23 billion to $10 billion across the industry
- Another rumor that's floating around is that ISIS had so much overwhelming interest in terms of partnerships that they decided to open it up to everyone. This is entirely possible if the hype bubble they built for themselves in the consumer stream leaked into corporate boardrooms I suppose...
- Due to these or perhaps other issues, ISIS has indeed confirmed that it will no longer roll out its own NFC network, but instead will open its system to interested credit issuers and banks by aligning to an existing mpayment structure. The problem here is that essentially, the value of ISIS is gone. The one thing that made it compelling is that it potentially was going to offer its own infrastructure so that other companies would not need to invest in one-off systems that only they could use. If ISIS won't be providing and will basically serve only as a manager over all of these companies- there's very little incentive for banks and issuers to be part of the consortium
- Given the level of buzz that came after their announcement that they would alter their plans, ISIS has also issued statements stating that in actuality, their m-commerce plans are accelerating. However, in the same statement they said they would ultimately "go to market with fewer [companies]" and anticipates the company will ultimately partner with three or four banks and processing firms. Doesn't sound like overwhelming interest to me...Seems like just a case of bad PR management
- Let's add to this story the fact that Google and Visa have essentially launched their own mobile wallets that are "open" saying that anyone who would like can join- if you had to choose between an existing mega company or a brand new consortium that hasn't launched yet, which would you choose?
- By the way, the Visa wallet promises click to buy, cross-channel solutions (read: web and in person), preference management (customer personalization) and special merchant offers. Moreover, they also promise that they will be able to run it on an existing global system, which would allow them to tap new/emerging economies like India and Russia)
- Square is also trying to jump into this game by scrapping all the mobile business altogether- they claim that through their process of using Card Case (merchants use "Register"- creative I know) customers can pay with just a name
- As if there wasn't enough competition, even Intuit is jumping into the game with their "GoPayment' process, which uses NFC to capture physical credit card information (See follow up post soon)
- That being said, ISIS still plans to team up with Salt Lake City to launch a pilot in early to mid-2012. They have also announced plans for Austin, Texas as their second pilot city
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