A new group of payment terminal providers will add Isis specifications for payments and loyalty programs, enabling the telecom-driven mobile wallet to reach approximately 90% of the addressable market for point of sale hardware in the U.S.
ID Tech, OnTrack Innovations Global, PAX Technology, Uniform Industrial Corp. and XAC Automation Corp. have agreed to integrate Isis SmartTap a proprietary mobile commerce software specification that leverages NFC to enable users to pay, present loyalty cards and redeem offers as part of the same transaction.
"Handset turnover is about eighteen months, while point of sale terminal turnover is six or seven years, so its a big undertaking for merchants," says Jim Stapleton, chief sales officer for Isis, a mobile commerce joint venture created by AT&T Mobility, T-Mobile USA and Verizon. "When a merchant sees what other merchants are getting from mobile payments, loyalty and special offers from a customer engagement perspective and wants that same level of function, we want that manufacturer to say that functionality is already in the terminal release, or is in the latest code."
A SmartTap-enabled POS terminal automatically recognizes and applies loyalty cards loaded in the Isis Mobile Wallet. Similarly, Isis Mobile Wallet users can receive, store and present offers with SmartTap-enabled merchants.
"90% of transactions may be payment only, but those 10% are a big driver of value for the merchant," Stapleton says.
The new point of sale manufacturers join other point of sale providers, including Equinox Payments, Ingenico and VeriFone, as well as gas station equipment manufacturers Gilbarco Veeder-Root and Wayne.
"A tap that combines both payments and loyalty is a much more interesting proposition. Earlier this year, Isis reported that those customers who engage with the wallet around merchant offers, by, for example, liking the merchant [in social networks], tend to use the wallet twice as often as those who dont," says Zil Bareisis, a senior analyst at Celent. "In addition, NFC and single-tap technologies can bring loyalty and rewards to places where historically it would have been very difficult to implement such programs, such as vending machines."
Isis first started working with point of sale providers to include Isis mobile payments a year ago.
"Mobile presents an opportunity for constant engagement, which can enhance the overall merchant/customer relationship. This can only be enabled by partnering with POS providers," says Jordan McKee, an analyst with Yankee Group.
As Isis which is in beta testing in Salt Lake City and Austin prepares for its national launch, adding payments and loyalty to the point sale network is a substantial lure for consumers and merchants who are reluctant to adopt mobile commerce.
"Its very important for Isis. Very few believe that mobile will take off because consumers want to pay with their phones. The reality is that merchants want to increase sales and they see the mobile device as a marketing channel that they can use to do that," says Rick Oglesby, a senior analyst at Aite Group.
"For digital wallets to take off, they need to deliver to the marketing and shopping desires of merchants and consumers respectively. And for that to happen payment infrastructure cant be dedicated to payments only," he adds. "It must be extended to include offer deliver, redemption, couponing and a variety of other stuff that we probably havent thought of yet."
Isis technology model differs from other mobile wallets. Starbucks, MCX, PayPal and Google are favoring software over NFC to deliver mobile payments technology to the point of sale, contending that enables easer deployment for merchants.
"Isis is chasing where the puck was. NFC was introduced more than 12 years ago and has gone nowhere. In Isis model they are very reliant on hardware." says Richard Crone, a payments consultant. "And whats missing here is major retailers bellying up to the bar for this."
Cloud-based and NFC-based mobile wallets are not mutually exclusive payments technology models, Stapleton says.
"Our Serve offering is effectively a cloud model," Stapleton says, adding Isis NFC model is safe and easy to deploy.
Many of the terminal manufacturers allow NFC payments via peripheral add-ons, enabling existing terminals to process both mag-stripe and mobile payments without a complete replacement of the point of sale terminal. "It can be done quickly," Stapleton says, adding one Isis partners is deploying 5,000 NFC terminals per week.
Isis has "thousands" of merchants signed up in Salt Lake City and Austin, and the company expects to announce national retailers soon, Stapleton says, though he did not release the merchants or give a national launch date.