We’ve been quite tough on Isis on our blog ever since the Verizon / AT&T / T-Mobile joint venture sharply scaled down its hugely ambitious plan to build a nationwide mobile payments platform, choosing instead to launch a mobile wallet service. This shift, humbling for the telecoms as it was, was not where our criticism was pointed. We all have to constantly adjust course (although in Isis’ case was much more than an adjustment) to account for the evolving business environment around us.
Where Isis Dropped the Ball
Rather, it was Isis’ assertion that the debit interchange limit that was approved by the Senate a month ago took them by surprise, forcing them to scrap the plan of building a closed loop mobile payments system that wasn’t making sense. “As transaction fees were limited and things were changed, it kind of changed the business model,” John Stankey, AT&T’s head of business solutions, told us.
What Stankey did not explain was how a rule that would presumably have a huge impact on the joint venture (the scale of the impact is debatable, but nevermind) and was more than a year in the making, and highly publicized at that, should not have been considered. The way we saw it, Isis’ woes were caused either by ignorance of their management on how the payment card industry works or by overoptimism regarding the cost and time frame for such a huge system to be built, or by a combination of the two. We stand by our assessment.
Yet, we also did manage to compliment Isis on the merits of the new course the joint venture had taken, although in a backhanded kind of way. Now we have received another indication that Isis’ mobile wallet is what we hoped it would be – an open payment service.
Why Isis’ Mobile Wallet is Good for Consumers
The report this week that Isis has signed on American Express, Discover, MasterCard and Visa to its mobile wallet project is good news for consumers. The involvement of all major U.S. card brands in the project means that the user, not the service provider, will have the choice of which payment card they will link to their m-payments account, something we have long advocated for.
Of course the press release is full of statements professing the credit card companies‘ love for “Isis’ open strategy,” even though it is very hard to find many other instances of such cooperation on the m-payments front (just a couple of days ago we wrote about a very much closed-loop mobile payments partnership between a carrier and a payment company).
The joint venture’s prior mishaps notwithstanding, we have to give praise where praise is due and Isis very much deserves it on this occasion. Opening up their system to all card brands will hopefully prompt other similar ventures, most notably Google’s, whose wallet currently links only to Citi-issued MasterCard cards, to do the same.
Eventually I have no doubt that our mobile wallets will become just like their physical counterparts and take all of our cards, cash and whatever other payment forms may be available by then. It would be nice to get to that point right from the start, rather than having to fight our way there.
Image credit: Isis.