Mobile commerce is a bit like the myth of Sisyphus: a big boulder being pushed up a hill, only to roll down again. In the case of m-commerce, it’s a huge opportunity with a lot of potential, but so often the promising-looking initiatives to deliver it end up sliding back to nowhere. Now with the huge takeup in smartphone and mobile data usage, AT&T (NYSE: T), Verizon, and T-Mobile USA hope that their latest attempt – an NFC venture they are calling Isis – will be the one to stick.
Although the service is a JV between three specific operators, the Isis service will be open to all wireless carriers, notes the release. All merchants and banks are also invited to participate.
First services will focus on point-of-sale payments, which will launch within the next 18 months, says the group. Although ultimately it looks like Isis wants to base payments around NFC chips in devices – which would allow users both to wave their devices in front of scanners at points of sale, and to manage their financial details securely – these are still a long way off from being de facto embedded in all handsets (although Google (NSDQ: GOOG) may drive the market faster to that point if Eric Schmidt’s preview of an NFC-supporting handset at Web 2.0 is anything to go by).
Meanwhile, another NFC-based initiative called payWave, which will presumably compete with Isis, is backed by Visa and is taking a different approach, embedding chips in portable microSD cards.
Initially, Isis will use the payment network of Discover Financial Services, which has some seven million merchant partners in the U.S. Barclaycard will be the first issuer on the network.
Juniper Research predicts that by 2014, mobile commerce – including payment for digital and physical goods, money transfers and NFC transactions – will reach revenues of almost $630 billion. Such services will bring in around $170 billion in 2010.
Will this venture go anywhere? Having the backing of three major operators covering some 200 million subscribers, and some large financial services organisations, seems to bode in Isis’ favor, since one of the big cons in the past with mobile payment schemes has been the lack of interoperability across disparate, proprietary systems. It helps, too, that people are already using their phones to pay for apps – and in some cases apps that are helping them pay for goods elsewhere, such as the app being trialled by Starbucks.
But cross-operator partnerships do not exactly have a good track record, either: in 2003, a European initiative called Simpay, which united Vodafone (NYSE: VOD), France Telecom’s Orange, and T-Mobile, had big plans for mobile commerce. Two years later, the JV closed with no services launched.
It is telling that Isis is looking to the financial services industry for leadership, hiring Michael Abbott, formerly of GE Capital, as CEO. The release describes him as “a veteran financial services executive with extensive experience in the payment and technology industries.” Let’s see if he can whip that team into shape.