Dont get distracted by the big-name telecoms that designed the Isis mobile wallet, or youll miss the wizard behind the curtain: American Express. The card brand could see a big increase in adoption of its Serve account if Isis succeeds.
In the revamped Isis app launched last week, anyone without the proper JPMorgan Chase or Amex credit card had to sign up for Amexs Serve digital wallet to make Isis payments. Isis at one time offered an Isis Cash virtual prepaid card to serve the same purpose, but Amex has now taken over that role.
Today, there is no Isis prepaid account. We are the prepaid account, says Stefan Happ, senior vice president and general manager of U.S. payment options for American Express.
For Amex, which overhauled its Serve digital wallet last month to make it a stronger competitor for prepaid cards, Isis is a powerful distribution channel, Happ says. We expect to get scale for Isisand for American Express Serve within Isisas part of Isis nationwide rollout. The combination of Isis and Serve really turns an equation of two plus two into five, not four.
Isis launched nationally after months of tests and years of development. Its operated by AT&T, Verizon Wireless and T-Mobile, and it announced in August that it would support a deeper integration of Serve into the Isis app. (Related article on page 7.)
Isis users can manage their Serve accounts with the Isis app. Consumers who sign up for Serve through the app get a hefty 20% cash-back offer. Isis did not respond to a request for comment.
[The national rollout of Isis] is beneficial for Amex, but its still too soon to know what the adoption of Isis will be, says James Wester, a research director for IDC Financial Insights. But Amex gets to claim some credit for being innovative. It has embraced everything from Foursquare to Twitter, so this helps to burnish that reputation.
American Express plans to allow consumers to load cash onto its Serve wallet at CVS and 7-Eleven locations later this year. Its a move that can bolster use of both Serve and Isis, given the close ties between the two brands, Happ says.
The cash-load piece is an additional capability that we are adding to Serve overall, Happ says, noting that CVS locations are largely NFC-enabled and can accept Isis payments. American Express accepts all forms of tender, such as credit cards, cash checks, etc. Its a way for any inflows that the consumer chooses to make it into the Isis wallet.
Serve can also function as a fallback option for Isis users wanting to make purchases at a merchant that cannot accept mobile payments, Happ says. If youre an Isis user, you dont have to rely exclusively on NFC being available at the merchant. If that happens you can use Amex Serve, he says.
The flexibility in payment modes can be beneficial, says Ben Jackson, a senior analyst at Mercator Group.
While there is a lot of contactless terminals deployed out there, the merchantsparticularly their staffsdont already realize that contactless is an option so they swipe anyway, Jackson says.
Serves status as a prepaid account may also prove helpful to Isis in winning over consumers, Jackson says.
People may be more willing to commit to a limited-risk payment tool than throwing their whole credit or debit card out there, Jackson says.
JPMorgan Chase, which is also participating in Isis nationwide rollout, says it is not working with Isis on a prepaid product, though a question-and-answer page on Chases website lists it as the issuer for the old Isis Cash account. A Chase representative would not discuss its mobile payments strategy, aside from affirming its ongoing participation in the Isis rollout.