Right now a scant 11 phones are supporting the Isis program, which requires a special SIM card in the phone and an NFC chip. To activate the service, a user must go into the store to get an Isis SIM card and must also download the Isis app. It’s pretty painless. After selecting a PIN you have an option of choosing to link a credit card or use a pre-paid option that you top up using a credit card. As a bonus, Isis starts you off with $10 in cash and if you fill the pre-paid cash card with more cash, you get another $15. But if you don’t make a charge using the pre-paid card every nine months you’ll get hit with a $2 monthly account maintenance fee.

Basically, that’s $25 for you if you try out the service. And if you visit one of the special Pay & Save merchants you might get even more. For example, Jamba Juice is part of the Pay & Save program, which means it will send special offers to your app and that whenever you pay with Isis you are also exchanging your loyalty card info. No more digging for those lousy punch cards!

My offer was a buy-one-Jamba-juice-get-one free. I didn’t take them up on it since I don’t need two Jamba Juices, but if you like smoothies and have one of the chosen phones, you could get more than a gallon of frozen fruit goodness for free when you count the $10-$25 you get just for signing up.

The transaction experience.

The transaction process is smooth, You whip out your phone, open the app, enter your PIN and then tap it against the contactless payment tab. You click a button that says “OK,” and you’re done. I’m not quite clear on what the “OK” button is for, since it doesn’t confirm my balance, which would have been nice. The clerk presses a button and you’re done. In my Jamba Juice test, the clerk fumbled the transaction a bit, and said that machine wasn’t working, but his colleague came right over and made it work. The clerk also said, “We’ve had a lot of problems with this,” but he may have just not known what button to press on the register.

Over at McDonalds, the process was the same. The only difference was the guy at the register clicked his button and the transaction was taken care of without any questions. As far as paying, I’d rate it as more convenient than cash, but less convenient than a credit card — mostly because of all the entering a PIN, swiping and then clicking OK, then manually refreshing to see what my balance is to confirm the amount. I can link multiple cards to the app and choose which one I want to use, but since it’s not accepted everywhere I shop, it’s not like I can forgo my wallet. And so I’m likely to stick with my credit card for the time being. But your mileage may vary.

A few caveats and quibbles.

I have some minor quibbles with the app, namely that I have to manually refresh to see my balance, which should update automatically and that random “OK” screen that has me confirm payment without actually showing me the payment. And that $2 monthly maintenance fee is pretty high, so if you don’t think you’ll use it, you may want to avoid the pre-paid cash card.

If you have loaded your cash card, then to cancel the service you will have to call a customer service hotline. They’ll want your card number, which will likely be on the same phone you’re calling them from, but you can work that out with a headset. Otherwise you can de-activate and re-activate cards from the app. The customer service hotline answered promptly and the people were polite and knowledgeable for my basic questions. As a note, the FAQ on the app is far more detailed than the one on the website.

I can’t get this service on my phone, and I’m not sure I’m terribly upset. Not enough places accept contactless payments for me to be secure dumping my wallet, and it’s not so convenient that I’d see myself using it over a credit card. It’s a nice-to-have option if you feel secure linking a credit card to the service (and I would on my own phone) for the random occasion you have your phone but no wallet, and you encounter a place that accepts contactless payments, but I wouldn’t pre-load any cash on it for that situation because the maintenance fee is pretty high. But depending on where you live and where you shop you may think it’s awesome.

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After getting told on Tuesday that my handset wasn’t supported under the Isis framework, and then asking a variety of merchants if I could use Isis there, I realized that this launch is softer than a goose down pillow.

Both the carriers and Isis sent out instructions on Monday letting consumers who have Verizon, AT&T and T-Mobile that they can go to a nearby store to get a SIM card put inside their phones. They can then link that SIM to a credit card issued by Chase, Capitol One or American Express. Consumers can also pre-pay on an account and use that if they don’t want to link to a credit card.

Verizon’s Isis display. They also have Isis hand sanitizer bottles!

So, starting off there’s a limited number of handsets one might use for Isis, although given that only a few million people live in both launch markets, I can see why carriers may not want to rush to deliver compatible handsets. But when I started calling companies listed on the PayWithIsis web site things got weird.

In the first few pages of results I encountered a bakery I know and love, so I called Sugar Mama’s Bake Shop hoping to see if anyone had used Isis yet to buy something. The owner, Olivia O’Neal, was confused. She wasn’t part of the Isis launch and said that for months other small business owners had been emailing her about Isis, despite the fact that she never filled out her paperwork and didn’t want to participate. Other businesses listed on the site were out of business (Sole Freco) or were listed in the wrong location (Pueblo Viejo Mexican).

And managers at Chevron and CVS, which were both listed, said they hadn’t heard of the program, and that they didn’t support it when I asked if anyone had tried to pay with their phone using Isis, or if I could use Isis. Granted, there are at least 400 businesses listed and I could have just gotten unlucky with my choices, but it was discouraging. Tom Cook, an Isis spokesman, sympathized with my problems and explained that the sites listed on the PayWithIsis web page were populated from a database that Mastercard offers of places accepting contactless payments.

And since Isis will work with any contactless payment display, those places do accept Isis for basic payments. Many just don’t know it. Meanwhile, Isis has a higher level of service called Isis Pay & Save for specific merchant partners who want to offer loyalty cards and coupons in the Isis app, although at least one of the local merchants I called, a pet store called Dogadillo, had put the program on hold. I’ve reached out to several other local partners as well to understand their experiences.

At best, Isis has some serious merchant outreach and consumer education to do, and at worst the limited number of handsets and lack of knowledge on the merchant side might turn off consumers who are eager to trade in their wallet for their smartphone. The launch of the program was delayed, and maybe these problems were some of the reason behind that delay.

Tomorrow I’ll get a phone that can handle the new SIM from Verizon and I’ll be able to try this out in the real world, but so far, as a consumer who was eager to play with the latest mobile wallet app, the Isis launch hasn’t been as much fun as I hoped.

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Consumers interested in Isis will need to head down to their carrier store to either buy an Isis compatible NFC-enabled phone or check if their phone is among the nine supported devices. They will also need to get a new SIM card from their operator to enable touch-and-go payments from their phone.

Some of the supported phones include: Samsung Galaxy S III, Galaxy S Relay 4G and Galaxy S II on T-Mobile and the Droid Incredible 4G LTE on Verizon. The Droid Razr HD and Droid Razr Maxx HD should also be ready this week at some point. AT&T will support the Galaxy S III, HTC One X, Samsung Exhilarate, LG Escape and Samsung Rugby Pro. Later this year, the HTC Amaze 4G and Samsung Galaxy Note II will support Isis on T-Mobile.

After downloading the Isis app from Google Play, users will be able to load up their American Express, Capital One or Chase credit card. Or they’ll be able to use an Isis Cash card, which can be pre-loaded from any credit or debit account. While shopping in a store, users will be able to tap their phone and pay at participating locations and also store and use coupons, offers and loyalty cards from retailers. If you’re in Austin or Salt Lake City, you can check here to see what locations support Isis.

Isis said it expects to have another 11 phones ready to go on the system by the end of the year. Salt Lake City users will also get free rides on UTA buses, Trax and Frontrunner vehicles through January 31, 2013. We’ll have a hands-on look with Isis tomorrow from my colleague Stacey Higginbotham, who will be testing out Isis in Austin.

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Isis expects to have 20 Isis-ready handsets in the market by the end of this year. It said it will have more details to share on Oct. 22.

Isis delayed its planned launch on Sept. 13 but didn’t commit to a new launch date. Reports based on internal documents pegged the launch for Oct. 22. Earlier on Wednesday, the Isis app became available for T-Mobile though there was no mention of when the service would go live.

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It’s unclear how current the document is and whether or not more delays will keep Isis from launching. An Isis representative told me today that no launch date has been announced and wouldn’t comment on the internal document. As we’ve mentioned before, Isis has been content to go slow so there could still be more delays ahead.

The document indicates that users will be get $10 of free cash to try out the Isis app. And if they opt in to an automatic reload feature, which will add funds from a Visa or MasterCard debit or credit card or from a Green Dot Moneypak, they’ll get another $15 in bonus cash. I believe this is the first time we’re hearing that Green Dot, a provider of retailer pre-paid cards, is a partner with Isis. There’s no mention of which devices will be supported at launch.

It’s unclear what is holding up the Isis launch though Mobile Payments Today quoted some sources that said the distribution of SIM chips necessary for transactions is one of the reasons for the delay. Employee training may also be slowing things down.

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Ryan Hughes, Isis chief marketing officer told me that delays are not related to big infrastructure changes, strategy shifts or contracts to nail down. It’s about ensuring that the entire system is set to go for all the partners and that consumers will be ready to use their smartphones to pay on day one.

“While everyone wants to get to market quickly we’ve focused on getting it right from the beginning,” Hughes said. “It’s a complex project and we want to make sure the connective tissue of loading a card and using it and all the events around it are wrapped up.”

This might not be that surprising if you’ve been following the progress of Isis. As we wrote about before, Isis has been content to take its time with its rollout as it lines up a host of merchants, payments networks, banks, handset manufacturers and other partners. This is in contrast to rival Google Wallet, another NFC-based payment system that launched a year ago.

Hughes told me before that the company was always prepared to go slow as it learned the ropes. Isis hasn’t committed to any other launches beyond Salt Lake City and Austin.

So this delay may not represent much of a set back in the long run, especially considering there’s no big momentum behind Google Wallet or other mobile wallets such as PayPal’s or Pay With Square. Consumers haven’t been clamoring for Isis either, so there’s not too much danger of disappointing a lot of users. But the fact that it can’t hit a wide launch target like summer 2012 with just two pilot markets is still surprising. And Hughes wouldn’t even commit to launching by the end of this year. Also, delaying its launch means Isis won’t be able to get into the market and gain some valuable experience.

Isis is still well positioned to make a splash in mobile payments because it can push its payment system through its carrier partners. And I still think Isis has a good lineup of partners, including financial institutions Chase, Capital One, American Express and Barclaycard. Hughes said the partner response has been more positive than expected, which has added to Isis’ workload.

I’m no fan of delays but I think it makes sense for Isis to get it right at launch. Consumers have no big issues with cash and credit so Isis will need to tell a compelling story about why they want to adopt a mobile wallet-based payment system. Weeding out problems and ensuring the system works smoothly will help Isis communicate a clear message that mobile payments are real and have value. Let’s just hope we see Isis at some point soon. It’s still early in mobile payments, but you gotta get in the game at some point.

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This news shows that not even the credit card companies have figured out yet which mobile payment standard will eventually be adopted. Like other major card providers such as MasterCard and Visa, Barclaycard is supporting both Google Wallet and Isis, which is a payment system created by Verizon Wireless, AT&T and T-Mobile. Barclaycard announced Isis support this past February, alongside Chase and Capitol One.

Of course, neither wireless payments system, which use near-field communications chips, is a guaranteed winner. The lack of an NFC chip in Apple’s new iPhone 5 suggests that mainstream consumers may opt for app-specific payments — such as that found in the Starbucks app — or through Apple’s new Passport app in iOS 6, which currently supports digital coupons and loyalty cards.

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VentureBeat is reporting that the Electronic Transactions Association, a trade association for the payment industry, has formed a Mobile Payments Committee, that will include all four of the top U.S. carriers — Verizon, AT&T, Sprint and T-Mobile — as well as Google, Isis, PayPal, VeriFone, and Intuit. The goal of the committee would be to help guide legislators and regulators on mobile payment public policy, sort out the different business relationships between the members and work on education for consumers and merchants. The real challenge would be to allow the systems like PayPal, Isis, Google Wallet and others to work together, something the committee will try to take on.

Cooperation could be very beneficial in helping mobile payments grow. Right now, the fact that until recently Verizon largely stymied efforts to expand Google Wallet to their devices, has shown how in-fighting can prevent different players from expanding. And it also sows confusion for consumers and merchants, who don’t know which system makes sense for them. That can hold back overall adoption of mobile payments. So it’s nice to see some of the different payment companies joining hands, though it would be even better to get more startups like Square on board.

But I think it will be hard to actually force the major players to cooperate on interoperability. My sense is that it’s still too early and most of the companies would be reluctant to hand over too much control to others. The main players are more likely to find common ground on things like on general policy and education, basic industry stuff. And if this committee is like a lot of committees, it’s likely to move slowly. So don’t expect too much, too quickly. We’re still in the early innings of the mobile payment game.

Image courtesy of phoenixdiaz

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Isis, the carrier-led mobile payment venture from Verizon, AT&T and T-Mobile, is preparing for its big summer debut with the release of a series of video tutorials aimed at educating users on how to use its tap-and-go system. The videos will also be embedded inside the Isis app as a resource for users.

Isis still isn’t saying when it plans on launching its near field communication payment system but the schedule is still set for a summer roll out in Salt Lake City and Austin, Tex. The new videos build upon an earlier introductory video released in March and are aimed at teaching users how to use the system. For example, the videos explain the difference between Pay & Go merchants, which can only process payments and Pay & Save locations, where users will be able to receive offers and coupons and store their loyalty cards inside the Isis wallet. In some cases, users will also need to present a barcode to a merchant before they can tap and pay.

The fact that Isis is releasing such detailed videos speaks to some of the challenges it faces in introducing a new payment system to users and ensuring that it’s easy to use.

“We’ve done enough testing that to know this is a new experience to tap your phone,” said Jamie Johnson, director of marketing for Isis. “We’re really erring on the side of making sure consumers feel good about the experience and feel enabled to use the wallet.”

Johnson said users will need to download the Isis app at launch but the carrier partners will pre-load the app on NFC-equipped devices in the future. It’s unclear which devices will support Isis, but HTC, LG, Motorola Mobility, RIM, Samsung Mobile and Sony announced last year they will launch NFC-enabled mobile devices that use Isis’ NFC contactless technology. DeviceFidelity will also make microSD cards and handset cases that will enable phones such as the iPhone to have NFC support.

As I wrote before, Isis has taken its time to get to market and has lined up a number of partners to help it get off the ground. AmericanExpress, Chase, BarclayCard and CapitalOne will place their cards in the Isis app, allowing it to reach 150 million U.S. consumers. In May, it announced that it will have hundreds of merchant locations available in the two launch cities including Macy’s , Aéropostale, The Coca-Cola Company, Champs Sports, Dillard’s, Foot Locker and Jamba Juice. It’s all part of setting Isis up to compete over the long haul, said Johnson.

Take a look at the videos provided exclusively to GigaOM ahead of their release later today to get a sense of how it will work:

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• NFC will be driven by marketing and loyalty, not payments
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• 2012: the year of confusion for NFC payments