Isis, the carrier-run mobile payments venture, plans to take its system nationwide this year.

The initiative, which was formed by AT&T, Verizon Wireless and T-Mobile USA, has been testing its contactless payment technology in Salt Lake City and Austin since October.

The cities have been a petri dish for the consortium, explains Jaymee Johnson, Isis' head of marketing.

He says that since last fall, the number of merchants with contactless terminals, a necessity for Near Field Communication-based mobile payments, has quadrupled to roughly 4,000 locations. Those users are tapping their phones, on average, roughly 10 times a month.

Isis is, however, being coy about setting an actual country-wide launch date.

"We are just saying that we are launching this year, simply to give the broader ecosystem time to act," Johnson says. "It's important for us to give the market visibility into where we are going and what we are doing."

By announcing a timeline of the rollout, Isis aims to stimulate banks to sign up for the service and merchants to invest in payment terminals.

The technology relies on removable plastic SIM cards to hold payment credentials and works only with NFC-enabled phones. Carriers will update their customers' SIM cards through upgrades, new contracts, or requests.

Today, Isis says, 35 devices from AT&T, T-Mobile and Verizon Wireless support Isis' method. In October, Isis supported just nine handsets.

Some of the most popular smartphones — namely the iPhone, Windows Phone and Blackberry 10 — are expected to support Isis this year, Isis says. Apple does not yet offer an iPhone with a built-in NFC chip, but iPhone owners can make contactless payments with products such as the Cashwrap sleeve, which added Isis support in January.

Banks and merchants that want to offer rewards using Isis' technology must sign up with the joint venture. Already, JPMorgan Chase, Capital One and American Express have done so.

Consumers can also make payments with a prepaid Isis Cash card.

However, onlookers remain dubious of the joint venture's value.

"My firm has three very large national retailers in the U.S. and two in Latin America as clients. Although Isis' value proposition of connecting mobile devices with a retailer's physical environment is extremely interesting to our clients, Isis is not top of mind as it remains unclear what its advantages are," says Philip J. Philliou, a payments consultant, in an email. "I understood Isis when they planned to compete with Visa and MasterCard. I am not sure what they stand for now. I need to hear something meaningful."

Indeed, the joint venture has been difficult for many to figure out.

"Is it fizzle or will it sizzle?" says Brian Riley, a senior research director in the bank cards practice at CEB TowerGroup. "They really haven't solved the issue of replacing this infrastructure. It's not cheap. So are you just going to create another monster that processes at one-and-a-half percent?"

Regardless, Isis is determined to drive adoption.

"We consider this just the start," says Johnson. "This isn't the destination, it's just the start. These are really the early days of mobile commerce in general."

Subscribe Now

Authoritative analysis and perspective for every segment of the payments industry

14-Day Free Trial

Authoritative analysis and perspective for every segment of the industry