ISIS Delay Points Out Mobile Payments Problem: No LeadershipWritten by Frank Hayes
ISIS has dodged a bullet. Just after Apple launched the iPhone 5 on September 12 without a surprise mobile-payments announcement, ISIS said its long-expected summer trial in Salt Lake City and Austin won’t start this summer after all. Some coincidence, huh?
An Apple surprise might have forced the mobile-operator consortium to rush into its launch. That’s not something ISIS wants to do, especially now that Google has already tried and abandoned ISIS’s chosen technical approach and the number of ISIS-supporting retailers still isn’t up to what ISIS wants it to be. And that’s not the worst of it: There’s still no leadership in mobile payments.
No one will step up. Big retail chains won’t really promote anything but magstripe cards carrying Visa or MasterCard logos until they’re guaranteed volume (though what they really want is interchange relief). PayPal and Google don’t want to put their brands on the line in a big way for in-store payment. The card brands want retailers to move to Chip-and-PIN and contactless, and they aren’t about to push consumers or issuing banks on mobile payments.
And everybody is waiting for Apple, which has dipped a toe in with its everything-but-payments mobile wallet, Passbook, but won’t go any further until it sees customers actually using it. For Apple, this is actually a big step forward—Apple-watchers have been expecting NFC-based payments in every iPhone since at least the beginning of 2011.
ISIS’s official position is that none of this is a problem. The delay is just for a little fine-tuning of the customer experience, the consortium says. There’s “overwhelming” support from all the partners, and no changes in strategy or business model are on the horizon.
None of which is exactly true. The issuing banks are grumbling because ISIS reportedly wants them to pay $5 for every card number it puts inside a phone. The technical strategy of putting card numbers inside the phone’s NFC Secure Element is looking iffy now that PayPal, Google and (probably) Apple will be using a cloud-based approach. As for the most important partners—retailers and customers—last spring ISIS insisted it had done plenty of customer education and was ready to launch in the summer, or even sooner if it got a big uptick in the number of stores signing on.
Now ISIS says it will make an announcement in October—not necessarily to set a date for the trials, but to offer more information about “updated launch specifics and momentum news.”
Maybe ISIS will even announce when it’s actually going to give us a launch date.
Let’s be clear: ISIS’s case of cold feet isn’t really much worse than Apple’s hesitancy or the fecklessness of Google and PayPal. The main difference is that those last three have something to show for their efforts, like custom in-store PIN pads and in-phone apps—although still no significant transaction volume for in-store mobile payments.
That’s not about to change without some real leadership—which can only come from one place.