Now that Isis has launched its mobile wallet nationwide at AT&T, Verizon Wireless and T-Mobile stores, the venture says its next priority is bringing more merchants on board.
"We plan to expand to new merchant partners in the next couple of months," says Jaymee Johnson, head of marketing for Isis. "We are working on a variety of partnerships with those kinds of promotions."
Consumers can link certain JPMorgan Chase and American Express cards directly to the app, and they can link other cards through American Express' digital wallet, Serve. Before using the wallet, consumers must download the app and obtain an enhanced SIM card from an Isis carrier.
"Now the question will be whether or not their subscribers will be willing to go through the process of procuring a new SIM chip, installing the chip on their phone, adding cards to the wallet, etc.," says James Wester, a research director at IDC Financial Insights. "It's not that hard, but it's not simple either."
Most of the phones sold this year have enhanced SIM cards, but some older models do not, says Verizon spokesman David Samberg. These SIM cards can be ordered online or obtained at a store for free, he says.
"And there's also more phones coming on with the enhanced SIM cards," Samberg says. "The NFC-capable phones were accelerating anyway the interest and adoption will increase."
Once the wallet is set up, consumers can use it at any of the hundreds of thousands of merchants that accepts Near Field Communication payments, Johnson says. "It's everywhere from quick serve restaurants and pharmacies to taxis and transit agencies that are using open loop contactless payments," he says.
However, even if the merchants have the technology in place to accept the wallet, they may not be active supporters. In its test cities of Austin and Salt Lake City, Isis received complaints over Twitter about merchants that "knew nothing about Isis" despite being listed on Isis' map of compatible stores.
Isis will also face difficulty in winning over card issuers to integrate with its mobile wallet, says Zil Bareisis, a senior analyst at Celent.
"The launch really means a national availability of handsets at the operators, it does not mean national acceptance, which is going to remain the biggest stumbling block, and largely outside of the operators' control," Bareisis says. Isis' early partners, Capital One and Barclays, are "no longer taking part in the rollout, so Isis is left with only two issuers, American Express and Chase," he says.
Isis is in discussion with both Capital One and Barclays, and is "trying to figure out a way to bring them back into the wallet," Johnson says.
With PayPal also making its own point of sale payment system more widely available as a result of its partnership with Discover, the competition is heating up, Bareisis says.
"And I am sure, [the retailer wallet, Merchant Customer Exchange] will want to have a say in what wallets will be accepted at their participating merchants, as it seeks to provide a consistent payment experience to their customers and merchant employees," he says.
Isis is also upgrading its technology. The mobile wallet is now available in about 40 smartphones. Once a user chooses one of the cards linked to the Isis app, a three-inch image of that card appears on the user interfaceand is remembered when the wallet is used again, Johnson says.
"The newer version us much more simplified and puts the payment first," Johnson says. The design work was done in house while the development was done by Mutual Mobile.
Users of the redesigned Isis wallet say it is a solid improvement over its predecessor.
"I've been using Isis for about eight months and have found their user experience to be less than ideal. I just downloaded the updated Isis wallet and it's a vast improvement," Wester, the IDC analyst, says. "That is important since mobile payments aren't just competing with each other but are also competing with a form factor, the plastic card, that is about as simple as it gets."
Some users had difficulty logging in. Payments consultant Richard Crone says he tried to access Isis on Nov. 14 via the Samsung Galaxy S3, which supports Isis across the three carriers backing the venture, but he received an error message.
"There are 2,000 different phones in North America. 40 may sound impressive, but the rule is if it doesn't work on my phone, it doesn't work," Crone says.
In an email, T-Mobile spokesman Scott Goldberg says Isis-ready smartphones from T-Mobile include: Samsung Galaxy S4, Samsung Galaxy S3 LTE, Samsung Galaxy S3, Samsung Galaxy S2, Samsung Galaxy S Relay 4G, Samsung Galaxy Light, Samsung Note 2, Samsung Note 3, LG Optimus F6, LG G2, Sony Xperia Z, and the HTC One.
Isis lists its supported phones on its website, though support varies by carrier, and the Isis list on Nov. 14 omitted some of the models Goldberg mentioned.
Randy Vanderhoof, executive director of the Smart Card Alliance, defended the current number of phones. "40 is a bigger number than a year and a half ago, when there were about six," he says.
And Isis' NFC-based approach uses "a proven technology," Vanderhoof says. "[NFC] has security that has been well tested."
The Isis launch doesn't settle the battle between NFC technology software-based alternatives favored by Starbucks, MCX, and PayPalas well as other technologies such as Google's Host Card Emulation, Crone says.
"The controversy surrounding the access technology isn't going to drum up a parade and grassroots support from merchants for Isis," Crone says. "The cloud will win. NFC was developed before we had data plans and access to the Internet over phones. With cloud-based technology, you don't have any dependency on a device manufacture, the carrier or the bank."
As of today, Isis is an NFC-based mobile wallet based on the hardware that is out there, Johnson says. "If there are competitive alternative technologies that arise we will evaluate them." Isis said this week that its technology teams are reviewing the details of Host Card Emulation.