November 14, 2013 by 1 Comment
Today Isis, the NFC-based mobile wallet, has announced its availability across the US. After all the setbacks, Isis must feel very proud today being able to launch nationally. However, it doesn’t mean that the road ahead is going to be without challenges. 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, largely outside of the operators’ control. And while EMV will help drive change in the acceptance infrastructure, the process is going to take time. With PayPal also making its new wallet much more widely available as a result of its partnership with Discover, the competition for mobile payments at the POS is heating up. And I am sure, MCX 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. Participation of issuers and ability for consumers to add their cards to the Isis wallet is another challenge. Capital One is no longer taking part in the rollout, so Isis is left with only two issuers, American Express and Chase. The new wallet features a re-designed user interface, which highlights the importance of the user experience. Even if the product is functionally rich, it won’t succeed in the market if the user experience is cumbersome. Perhaps the biggest coup for Isis lately has been its partnership arrangement with Amex Serve. Not only it enables those that do not have Amex or Chase credit cards to make use of an Isis wallet, it also gives the wallet more versatility. Through Serve account, customers can send money to their friends (P2P) or pay bills online; they are no longer limited to only physical POS transactions via NFC. Integration of offers, such as with Coca Cola, Jumba Juice and others, into the wallet experience is another important feature. After all the hard work, the Isis team deserves congratulations for reaching such an important milestone. Getting the customers to adopt and use the wallet and transactions flowing through the system must be the next goal.
September 18, 2013 by Leave a Comment
You know the drill – you go into the store, select your goods, and take them to the cashier to check out and pay. What if we flipped the process on its head and you started with a check-in instead? You come to the store and your phone announces your arrival. The merchant knows you are here and is able to communicate with your phone as you move around the store, providing relevant information, such as product details, stock availability and special offers. When you see something you like, you just add it to your virtual shopping basket and when you are done, you simply leave (most likely, after you’ve demonstrated to someone that the contents of your shopping bag correspond to the items in your virtual basket.) What about payment? Well, the payment simply happens in the background based on your registered preferences (e.g. a card). Forget NFC, EMV and other complex buzzwords. We already highlighted this as a potential future scenario in our report on Digital Wallets last year. A number of announcements in the last 10 days or so indicate that this future might be closer than we think. Both Apple and PayPal announced new developments based on Bluetooth Low Energy (BLE) technology, iBeacon and Beacon respectively. The Beacons are essentially small devices that merchants can put around their stores. These devices then use BLE technology to communicate with other devices, such as Bluetooth compatible phones. Their energy consumption is very low and they don’t need Wi-Fi or a phone signal to work. Most excitingly, with built-in micro-location geo-fencing features, Beacons can enable new applications in indoor mapping. For example, iBeacon supports “enter” and “exit” events, so it can send different notifications while entering into the range and exiting out of the range. BLE has been touted for some time as NFC killer, and it’s easy to see how it can replace the NFC payment (NFC in card-emulation mode). Of course, NFC is also simply a communications technology (peer-to-peer mode), so BLE will also be competing with NFC tags. BLE devices are more expensive than NFC tags (~$30-50 vs $0.10), but their communication range is much bigger (up to 50 metres vs ~4cm), so the merchant would need fewer of them. It may be a coincidence, but there were further bad news to the “NFC camp” in the last few days in the US. First, Capital One, one of the three issuers that supported the Isis pilot (Chase and Amex were the other two), announced it would be withdrawing from Isis. Then, Google Wallet announced its new app with many new features, such as P2P payments. The app will be available to all Android phones, including those running on MNOs other than Sprint. While Sprint was the original and the largest MNO partner, Google Wallet has since rolled out to a number of smaller networks, including Virgin Mobile, US Cellular and Metro PCS, so technically it was available to more than one MNO, just not the 3 large giants behind Isis. The new app doesn’t change that – if you want to use NFC payments at the POS, it will still only work with selected handsets on Sprint and those other MNO partners. However, to me this is another indication that Google Wallet is re-focusing its attention on e-commerce, P2P, and other payment use cases, just not physical POS payments. I also thought the announcement on offers was interesting, as the wallet allows the customer to capture the offer irrespective of where it comes from and present it for scanning at the POS. The significant shifts here are the expansion of the universe of available offers and the fact that you don’t need NFC and tapping to get them redeemed, both of which could important catalysts for increased usage of the wallet. Mobile payments never cease to be exciting and interesting. Integration of BLE technology could be a game-changer for the industry.
August 9, 2013 by Leave a Comment
Arguably, it is fair to say that Isis, a mobile wallet from the leading US mobile network operators, has so far attracted more criticism than admiration. Its launch was marred with delays, as the company made changes to its business model and kept refining the solution. It finally did launch with pilots in Austin, Texas and Salt Lake City, Utah in October last year and while the company would not release customer numbers, it did say recently that “on average, active Isis Mobile Wallet users tap more than 10 times per month.” Last week Isis announced a national roll-out scheduled for later this year. That raised a few eyebrows as most of us know the challenges associated with deploying NFC technology in many markets, and especially the US. While there are increasingly more NFC phones available in the market and Isis promised iPhone support (most likely, via a special case), the issue of NFC-capable POS terminals remains. And if anything, that issue potentially just got bigger after the added uncertainty over debit fee caps, network routing and, subsequently, EMV (see my earlier blog.) Then today came another announcement which hinted how Isis was going to address the NFC issue – by partnering with American Express and incorporating Amex Serve platform into its wallet. To me this sounds like an attractive deal for both parties. Amex Serve was one of the first of the new breed of digital wallets to market, although it hasn’t really taken off (so far) as a standalone proposition. Amex’s decision last year to partner with Wal-Mart in launching Bluebird was in part due to the desire to better utilize the Serve platform and the underlying technology. Isis gives Serve another route to market. At the same time, Serve enhances Isis wallet by making it more universal – it is no longer just a retail POS solution, but a wallet that can be used for other purposes as well, such as online or P2P payments. The irony, of course, is that the piece of technology which reduces dependency on NFC and enables broader set of use cases is the good old plastic card linked to the Serve account. We’ll see if Isis is able to deliver national roll-out this year; after all, they have missed most of their own deadlines so far. But the latest deal with Amex has the potential to change that track record.