Isis Adds Vending Machine Pacts to Lift Mobile-Wallet Use

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As Isis continues trials of its mobile wallet, it may find nothing warms consumers to a new mobile-payment system like an ice-cold Coca Cola.

The mobile-pay venture, formed by AT&T, Verizon Wireless and T-Mobile, has signed two deals that would allow consumers to use its Near Field Communication-based mobile wallet at vending machines that accept cashless payments.

"Vending is a great place for consumers to be able to use the Isis Mobile Wallet, particularly during the early days of their initial use," says Jim Stapleton, chief sales officer with Isis.

The first deal, with Coca-Cola, allows Isis payments on nearly 200 vending machines in Austin, Texas. The second, announced Dec. 3 with USA Technologies Inc., allows Isis payments on up to 7,500 machines operated by the Malvern, Pa.-based cashless payments vendor in Austin and Salt Lake City.

Isis has heavily marketed its mobile-pay system in these two test cities since its October launch, but there are still some early issues with merchants not understanding how the mobile wallet works. 

Vending machines, by contrast, are a "low-risk environment" for consumers to learn how to make payments and redeem rewards without the pressures of a traditional checkout line, Stapleton says. 

"The USA Technologies and Coca-Cola relationships will help consumers get a feel for the tapping motion while experiencing the benefit of making purchases and redeeming loyalty points without the need for carrying cash or coins," Stapleton says.

Stapleton says Isis will continue to support an open-platform model in which merchants can support consumer choice.

Isis utilizes MasterCard's PayPass, Visa's PayWave, Amex's Express Pay and Discover's Zip to make contactless payments anywhere these networks are accepted, Stapleton says.

"Isis believes strongly that merchants need to be in position to respond to the choices their consumers make in their utilization of mobile wallets," he adds.

Stapleton says Isis has no specific data to share at this time regarding how consumers and merchants are accepting the mobile wallet during the pilot.

For USA Technologies, the Isis mobile wallet joint venture represents an opportunity to increase use of its cashless-transaction capable vending machines.

"We're looking for more vendors to seek mobile payment capabilities, so this marketing opportunity with Isis helps us lessen that sales cycle if we can expose more consumers and vendors to the process," says Veronica Rosa, vice president of corporate communications and investor relations for USA Technologies.

As of Sept. 30, USA Technologies reported about half of its 174,000 ePort Connect systems use the NFC-enabled technology, Rosa says.

A vendor already using a unit powered by USA Technologies' ePort G8 technology could promote the mobile-pay system by placing an Isis decal on the unit, Rosa says.

"It's as simple as that," she says.

Vendors with older machines can seek upgrades to handle Isis payments, Rosa says.

"We have many retrofitted machines of different ages, so it does take some time," she adds. "But any marketing we can do to promote cashless payments helps."

The vending machines would work with any NFC-enabled mobile wallet, Rosa says. As such, a vendor could also place a Google Wallet decal or one from a local bank on their machines to advertise acceptance of multiple wallets, she adds.

There is no question that cashless capabilities at vending machines represents a key strategy for any mobile payments initiative, says industry analyst Todd Ablowitz, president of Centennial, Colo.-based Double Diamond Group, LLC.

"We have seen this before with USA Technologies, to leverage new rollouts to help them get their readers on more vending machines," Ablowitz says. "It's a good fit for Isis, and a very good strategy for USA Technologies."

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