The Isis mobile wallet, a joint venture of AT&T, T-Mobile USA and Verizon Wireless, proceeded with great caution in 2012, delaying its test launches and generally keeping most industry observers guessing as to where the initiative stood.

At the same time, Isis was keeping pace with the progress of Google Wallet, which launched a year earlier. Even though Isis began its test just two months ago, the venture works with a comparable number of issuers and phone models as Google — and with more carriers.

"The delays for the Isis launch weren't shocking, but they also weren't very encouraging," says Jim Van Dyke, president and founder of Javelin Strategy and Research.

The Isis wallet allows payments from a limited number of smartphones equipped with Near Field Communication chips for contactless payment. The Isis app also displays targeted offers from participating merchants.

While test-launch delays should be expected for a project the magnitude of Isis, the industry did not see similarly public delays from rivals such as Square, PayPal or Google, Van Dyke says.

"I believe they were being overly cautious because the competitors were setting the pace," Van Dyke adds. "There is no precedent for caution to play out well in the payments space."

Working out the details proved lengthy for Isis, especially since the joint venture had originally declared a pilot-test launch would take place in Salt Lake City and Austin, Texas during the summer. It missed its self-imposed deadline by launching in October.

"From the start, we have been focused on getting this right," says Jim Stapleton, chief sales officer for Isis. "Our success in Austin and Salt Lake City validates the decision to launch when we did. We look forward to what the future holds."
While the payments industry waited for the official Isis launch, it embraced a report of an "unofficial" launch, which turned out to be an installment of Isis payment readers in cafeterias at the Verizon Wireless headquarters in New Jersey.

In the meantime, Google encroached on Isis' turf through an agreement with Utah food stores to deploy the Google Wallet as a payment option.

The Isis plan suggests its testing period could last 6 to 9 months in those cities before a larger rollout takes place, Stapleton says. Isis has avoided making an official statement about when it will begin its next phase.

As Isis progresses, it will serve as an example of whether NFC is a viable technology for mobile payments.

"I like the benefits of NFC and use it daily [on his smartphone], but why didn't Isis couple it with some other technologies as a better way to serve their goals?" Van Dyke asks.

Companies that use a multi-pronged approach in mobile payments provide more value to users, Van Dyke says. Some mobile wallets use quick response (QR) codes, which are two-dimensional bar codes displayed on a phone's screen, to allow payments at the point of sale. Others store payment data in the cloud.

Isis could "use the cloud or QR codes in the short term, while NFC is gathering steam for the long term," Van Dyke says.

Isis already had a card in place to ease the transition to mobile payments. Isis Cash, a Visa reloadable prepaid account, appears in the mobile wallet for the consumer, who receives the plastic card when enrolling in Isis.

Though offering a plastic card would seem to undermine the Isis venture's mission, Stapleton says it brings the Isis prepaid account in line with other payment accounts users can link to the Isis app.

"Every card in the Isis Mobile Wallet has a companion plastic card, including Isis Cash," Stapleton says. "Each card in the Isis wallet actually lives both in the mobile wallet and in the traditional plastic form, ensuring that consumers retain the relationship that they currently enjoy with their bank, no matter how they pay."

PayPal incorporated a plastic payment card with its digital wallet, though PayPal reports most transactions take place without the card. Google is reportedly considering a plastic card to complement its Google Wallet as well.

Overseas, telcos created a comparable joint venture called Project Oscar. This eventually launched in October under the name of Weve with a mission to first establish itself as a mobile advertising and marketing service. 

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