There are reports that Verizon, AT&T and T- Mobile intend to invest more than $100 million in Isis, their joint mobile payment venture, to boost mobile payment capabilities in this emerging market. If these reports are on the mark, the investment underscores the swelling interest and intense competition now seen in this relatively new form of touchless transaction.
Mobiledia and Bloomberg News report that the new round of funding is intended to enable Isis to more strongly compete against Google Wallet, first rolled out in May. The burgeoning mobile payments market is already sized by Juniper Research at $240 billion this year, and may reach $670 billion by 2015. (These forecasts represent the gross merchandise value of all purchases or the value of money being transferred, Juniper says.)
For consumers, mobile payment options provide a way to store credit, debit and other value cards within a smartphone, enabling payments to be automatically made via a tap close to or on a near field communications (NFC) device.
For businesses, mobile payment systems offer an inexpensive and standardized infrastructure for accepting and processing payments. Even the smallest entrepreneur is able to accept electronic payments this way, thereby dramatically leveling the playing field with larger operations with payment processing infrastructures.
For marketers, mobile payments offer a real-time or near-real-time vehicle for extending offers or coupons.
Along with the telecoms, Isis also recently signed deals with major card issuers such as Visa, MasterCard, Discover, and American Express. The service is expected to pilot soon in two locations: Salt Lake City and Austin, Texas.
The rise of near field communications (NFC) is revolutionizing this capability. As Gary Lombardo of Demandware recently pointed out in a post on the future of digital shopping, NFC is the great enabler of the mobile payment revolution. Consumers will maintain their digital wallets — including debit and credit cards — within their mobile device, and while in a retail setting, simply tap their phone against an NCF reader will enable the transaction. as he put it:
“Near field communication (NFC) has the potential to be the most disruptive and have the biggest impact for retailers…. It will link together applications and services across different industries, including mobile commerce, mobile marketing, and mobile customer relationship management. For shopping, consumers will be able use NFC to check-in to locations, acquire and redeem loyalty points and coupons, learn more about products, and use it as a form of payment.”