Isis’ campaign to win over consumers starts at SXSW

Isis, the mobile payment joint venture of Verizon (s vz), AT&T (s t) and T-Mobile, is finally getting a public viewing at South by Southwest, with consumers able to see the near-field communication wallet in action. The demonstration at Isis’ lounge and booth sets the stage for Isis’ rollout this summer in Austin, Texas, and Salt Lake City.

We’ve got a little video from Isis to show some of the basics steps involved and how consumers will use it to pay, save and build loyalty with retailers. It walks people through the process of unlocking their mobile app with a PIN, picking their funding source, using applicable deals and then tapping to pay. It’s the first in a series that Isis will continue to roll out as it prepares to launch officially.

I chatted with Isis CMO Ryan Hughes about the payment service, what attendees will get to see and how Isis wants to differentiate itself in the mobile wallet market. He said SXSW visitors will see three demos, including a grocery store scenario in which a user can add a loyalty card, activate an offer, and check out with a tap of their phone at a point-of-sale terminal. There are also demos of paying for items using Isis at a vending machine and also obtaining offers by tapping a smart poster.

Hughes said Isis is looking to go beyond just a simple payment alternative and is trying to be more valuable to both consumers and merchants. One way is through a Twitter-like feed inside the Isis app that allows users to follow the merchants and retailers they like and get updates from them. That allows consumers get live discounts and lets a merchant push out offers directly to a consumer and build a stronger relationship with their customers. When merchants integrate the Isis commerce stack into their payment terminals, they will be able to provide new offers and update loyalty info after a person checks out through the Isis app.

“Our objective isn’t to change the way people pay, we want to fundamentally change the way people shop,” Hughes said.

Isis is really trying to deliver more value for its financial partners, too. It just announced it will launch with Chase, Capital One and BarclayCard. Hughes said the banks will be able to add their own features inside the Isis app, which can then be accessed when a user taps their credit card within the app. The banks can include recent transactions, the ability to pay their bills or provide special offers or rewards to their card holders.

It’s unclear how big Isis will be when it launches. Hughes declined to say how many handsets will be supported or how many merchant locations will be able to handle Isis payments. But he said the company will leverage the scale of its carrier partners, which represent 240 million customers, to deliver a broad service. And he said the focus will be on ensuring the system works smoothly so merchants and consumers are able to easily understand the value of Isis payments. The company is set on making that work first and hasn’t announced when it will expand to new markets.

Isis has a lot to prove, not only competing against Google Wallet (s goog), PayPal (ebay) and others, but also in convincing people that NFC is actually capable of transforming mobile payments. But I like the talk coming from Isis. They understand they need to provide more value than just an alternative to a card swipe. And they’re trying to come up with some new ways to connect merchants and consumers through offers. Isis is also taking a methodical approach, lining up all the right components and not committing to an aggressive timeline. I think that’s smart so users and merchants don’t sour on their first experiences with Isis. NFC is still not a mainstream technology and there’s a lot of work that needs to be done to get NFC-handsets out to consumers and make sure retailers and merchants upgrade their hardware and software. It’s not going to happen overnight but Isis seems to understand and embrace that.