Mobile payments are a hot topic among phone makers, wireless carriers, and payment processing companies this year, and those groups looking to bypass the traditional payments industry are finding it a little harder than expected to break free.
The success or failure of mobile payments will come down to whether or not retailers can be convinced to install equipment for accepting payments at their registers and participate in payment networks, and so far they are balking unless they know for sure that their customers will be able to use Visa and Mastercard when making payments, according to a report Wednesday in the Wall Street Journal. Accordingly, a joint venture among AT&T (NYSE: T), Verizon, and T-Mobile called Isis that hoped to set up its own payment network is bowing to that reality with plans to scale back its ambitions and roll out a “mobile wallet” instead, that would let phone users pay with their phones but through their existing credit-card accounts.
Isis had tried to get up and running with Discover as a partner, and Discover is simply too small a player in payment processing to really move the needle in the retail industry, according to the report. A request for more details or confirmation of the report was not immediately returned by representatives for Isis.
The organization is still committed to using NFC (near-field communications) as the technology behind the mobile payments network, which puts it squarely in line with a number of mobile handset makers and software developers, such as Google (NSDQ: GOOG) and Research in Motion (NSDQ: RIMM), which are planning to support their technology in their phones.