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Isis launch set for Oct. 22 even as handset penetration remains an issue

Starting on Monday, some smartphone owners in Salt Lake City, UT, and Austin, TX, will be able to tap and pay for purchases using the Isis mobile wallet.  

Isis uses NFC technology embedded in some smartphones to enable contactless payments at several hundred retailers.  Next week’s launches are the first for Isis and come after several delays.  

“Isis faces the important and very real challenges of needing adequate NFC device penetration, universal NFC acceptance at the POS, and broad-based card issuer participation,” said Drew Sievers, co-founder and CEO of mFoundry, San Francisco.

“Ultimately, Isis will need to have enough NFC devices in market to attract enough customers and merchants to the solution,” he said.

“Not having the iPhone in the mix is a big obstacle to ultimate success.”

Competing mobile wallets
The Isis mobile wallet is a joint venture of AT&T, Verizon Wireless and T-Mobile USA and is similar to Google Wallet in its use of NFC technology.

The Isis launch comes as non-NFC mobile payments options are gaining, such as the use of branded and third party apps that show a 2D bar code which can be scanned to authenticate payment.

For example, earlier this week it was reported that customers in Apple stores will soon be able to use the Passbook app to pay for purchases, with store associates scanning the 2D bar code on their screens using an iPod touch.

The Isis Mobile Wallet is already available in Google Play.

Consumers who download the app on one of the handsets that works with Isis will be able to open the app in participating retailer, enter their PIN and tap their phone at the POS terminal to pay.

Users will be able to select a payment card before they pay or skip this step to use the default card. Users will also be able to check to see if they have any offers from the merchant.

When users tap their phone at the POS terminal, their payment, loyalty information and any offers are automatically sent.

Users will receive a confirmation message after every tap.

Isis ready retailers
“Isis Ready” signs will appear in merchant locations to let shoppers know they can use the Isis mobile wallet to pay for their purchases in these locations.

Several retailers have already announced that they will accept Isis payments, including  7-Eleven, Foot Locker, McDonald’s, Macy’s, The Home Depot, Jamba Juice and Coca-Cola – for use in its vending machines.

American Express, Discover, MasterCard and Visa have also previously announced that they will accept payments made through Isis.

Isis has not yet announced which phones the Isis app will work with. Reports suggest Isis is planning to have 20 handsets ready to use the mobile wallet by the end of the year.

An NFC chip is embedded in many newer Android phones but is not available on iPhones.

Google Wallet is already in place in more than 100,000 in several different markets. Its list of partners includes many of the same ones as Isis, such as Coca-Cola, Footlocker, Jamba Juice and Macy’s

“Whether [the Isis launch] is a boost or bane to NFC success remains to be seen,” Mr. Sievers said.

Final Take
Chantal Tode is associate editor on Mobile Commerce Daily, New York