CHICAGO – As new systems appear and old ones fade, ISOs are wondering who will triumph in the “mobile wallet wars.” According to the mobile-pay venture Isis, a clear winner may never emerge.
Any time a competitor gains an edge, the conditions for victory shift. That fosters change, not a win or a loss.
“It’s more of a journey because it’s a complicated market that is changing all of the time, and mobile payments are not going to happen overnight,” says John Theiss, vice president of merchant sales for the Isis mobile wallet initiative.
His conmments came during a panel discussion on value-added services for mobile wallets here last week at the Fifth Mobile Contactless Payments Innovation Summit.
Isis has supported partnerships that don’t value one mobile-payment system over another. Its issuer partners say they will support systems other than Isis, and merchant partners such as Jamba Juice are similarly keeping their options open.
With mobile payment initiatives, the industry is undergoing “the biggest transformation we’ve ever seen,” and developers face big hurdles along the way, Theiss said.
Isis, a joint venture of U.S. telecommunication companies AT&T, Verizon Wireless and T-Mobile USA, has faced its own challenges, such as delays in its planned testing in Salt Lake City and Austin, Texas.
Isis most recently said it would provide an update this month about the planned tests, besides announcing which Near Field Communication-enabled handsets will work with the Isis mobile-wallet system.
The delays have resulted from tweaks to the Isis system, meant to ensure the “consumer experience with the Isis mobile wallet will be flawless,” Theiss said.
In the meantime, Isis developers have not wavered in their conviction that NFC-based contactless payments will be the best technology for mobile wallets, he said.
Alternatives include cloud-based payments, such as PayPal’s mobile wallet, and systems that display bar codes on a phone’s screen, such as the mobile Starbucks card.
“Over time, the security of NFC and what it offers will make it ubiquitous in the same way that cameras and Bluetooth have become on mobile phones,” Theiss said.
Indeed, more phones with NFC chips are available to U.S. consumers than just those that support NFC-based mobile wallets, such as the Isis and Google wallets.
Weighing NFC against other mobile payment technologies has become a compelling industry debate, and the panelists shared their views.
Kevin Vine, interactive manager for Dunkin’ Donuts, said his company has to keep all options open and remain prepared to accept payments through numerous technologies.
Dunkin’ Donuts revealed its first mobile payment application in August, emphasizing the purchase of Dunkin’ Donuts gift cards.
“The reality is you have to present options for payments that don’t live in your application,” Vine said. “The bottom line with your own application is you want consumers purchasing your [virtual] cards.”
Donnie Diaz, director of information systems for Jamba Juice, said his company’s philosophy is “you can’t just invest in one solution.”
As proof, Jamba Juice has already agreed to support the Isis mobile wallet and accept PayPal payments at the point of sale.
“We are a small company, and we concentrate on convenience and security,” Diaz said. “We try to partner with the right folks who can help us.”
Any successful payments technology will have to find a connection with consumers.
Isis liked what it heard from consumers when researching locations for its test launch, Theiss said.
“Consumers resonate to the value associated with a mobile wallet and its ability to include multiple issuers,” Theiss said. “Consumers don’t have to always acquire a new piece of plastic [to add cards to a mobile wallet].”
For merchants, mobile wallets with NFC technology represent a chance for “one-on-one engagement” with the consumer to complement their marketing strategies, he said.