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Isis May Get $100M, But What Is The Future Of Its Mobile Technology?

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Near Field Communications with mobile devices is still far from being a mainstream technology, and there have been precious few examples of NFC-enabled mobile payment services, but operators are taking the bet anyway, it seems — if only to make sure that someone else, like Google (NSDQ: GOOG), doesn’t cash in on the odds before them: AT&T (NYSE: T), Verizon and T-Mobile are reportedly gearing up to invest as much as $100 million in Isis, the mobile payments joint venture they established last year.

The report, from Bloomberg, cites people close to the situation, who note that the actual amount of funding will actually depend on how many merchants and banks will sign up to the platform. None of the operators went on record to confirm the story.

The idea, according to the report, is that the investment will help Isis (and by association, the operators) build up a stronger mobile payment solution than the one being developed by Google — called Google Wallet — which is also using special NFC chips embedded inside mobile devices to enable an encrypted and secure transmission of a financial transaction. At some point, the report implies, these could all be competing against each other, rather than existing alongside as current payment options do.

If that is the case, though, realistically, the number of actual competitors in the point-of-sale game is significantly bigger than simply Google, if you count not only other kinds of mobile payment options like Square, as well as the huge range of services that do not hinge on using a smartphone and are in widespread use already, such as credit cards and — wait for it — cash.

If true, today’s report is yet another example of where operators are putting in a lot of effort to be in the center of the growing area of mobile transactions. Earlier today, another operator, Telefonica, signed up Boku to enable carrier billing for apps — another kind of mobile payment that operators hope to corner someday soon.

So far, Google Wallet has announced a pilot in selected markets with Sprint, using Google’s own Nexus devices (made by Samsung).

Although Isis has been in development since last year, it is not likely to start its first services until the middle of 2012. In addition to the mobile operators, other parties that have signed on to the service include American Express, Discover, Mastercard, and Visa. But to put this story into some more context, there have also been reports that the Isis operators have scaled back some of the original ambitions they had for the service, as something that would compete with those credit card companies.

Juniper Research gives a very optimistic forecast for mobile payments: its researches believe that they could generate as much as $670 billion by 2015, and even this year could bring in as much as $240 billion.

But that is covering a whole range of mobile payment options — mobile ticketing, NFC contactless payments, physical goods purchases and money transfers, many of which can be made using other technologies today without NFC.

If you look at NFC alone, Juniper’s number is a lot more modest: only $50 billion by 2014. That makes the Isis $100 million — if it is true — sound like a lot of investment indeed, unless those operators can figure out a few more ways of milking money out of the technology in the short to medium term.

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