ISIS National Launch

My informed view is that carriers are 2 years late to this game, have lost the opportunity, and may actually suffer significant negative consequences from this launch

Venture Beat has good article on ISIS’ planned national launch later this year. My teleco friends tell me there will be $200M in advertising to support it (rumor is Sept/October).

As I was the first blogger to uncover this thing (4 years go Project Mercury and had many of the participants wrong), the initial 2008 supporters  (Discover, Walmart) walked away from it in 2010 after ISIS switch from a retailer friendly model, to a bank/card model. Given its been over a year since my last ISIS post, thought I would continue to provide my perspective… (you get what you pay for).

After speaking directly to top 5 Bank CEOs, Card Heads, Top 10 Retailers, as well as mobile platform leaders…. My informed view is that MNOs are 2 years late to this game, have lost the opportunity, and may actually suffer significant negative consequences from this launch. Specifically this may be the event which creates a tipping point where MNO’s lock on phones (including subsidization) makes a big turn.


  • Customer Behavior Barrier (see blog). Customer must buy new phone, obtain new SIM (GSM only), register payment instruments, change the way they pay physically, change the financial way they pay (no more debit)… each one of these is a show stopper.
  • Where will I use it? Globally, it is well known that there are 3 areas which drive new payment type adoption: Grocery, Gas, Transit.  Rumor is that ISIS may have gotten a big Gas win (?buying Exxon’s speedpass?) but given that top 20 retailers (corresponding to 60% of retail spend) have all said they will not support NFC consumers must still carry their physical card. See list of ISIS merchants (
  • My choice of payment? If the first 2 were not significant enough, there are no debit cards in the ISIS wallet. Most of the readers are probably points junkies like me and don’t understand mass market consumer behavior. Mass Consumers don’t use credit cards frequently, roughly 80% of credit cards have less than 5 transactions per month. This is why Banks were supporting ISIS.. to drive increased credit card usage. Of course this is also the reason merchants have refused to support it.
  • WHY will I use it? What is the value proposition? to Consumer? How is it better than a plastic card? In the 7 pilots my teams have done globally (w/ Citi), we always see a novelty phase, where consumers want to use their new phones.. they see it works.. but it really isn’t any faster than physical card. I would be my britches that ISIS has seen this dynamic themselves in Austin and Salt Lake.. it is NOT something they will muscle through. Unfortunate they aren’t really discussing w/ they owners.
  • Competition: Payment capability vs. New Platforms. As I wrote about yesterday, Apple and Google are making payment part of the OS. New phones from Apple and Google will not support SIM based SWP. In fact I believe Apple will embed SIM (taking away all carrier keys). We will see US MNOs launch w/ Windows phones and a few customized android handsets. MNOs are thus focusing a marketing effort around a “new” payment capability with “old” phones. SWP SIM, is not a “killer app”, particularly against a new Google XPhone or new iPhone
  • Demographic/Audience. As tech leaders and gadget freaks buy the new iPhone and XPhone, MNOs will have a “unique” audience using ISIS, (perhaps teenagers for example). While vending machines and QSRs would step up to support this demographic, Nordstrom and Shell will not. There will be a reinforcing effect as network focused on delivering value (and retaining) current customers.
  • MNO “leadership”. If you had the CEOs of Verizon, ATT and ISIS in a room and asked “who owns mobile advertising”?.. ISIS would say nothing if both of the other CEOs were in the room.. They want it.. but no one will give it to them as they can’t execute with what they have in this space.  Verizon would say “many partners”… MNO preference would be to sell the platform akin to VZ’s $550M search sale to Microsoft in 2009. MNOs don’t want to run a business, they want to sell access (nodes). Their about to be disinter-mediated as the “nodes” move from subsidized/locked to Google/Apple.
  • Bank support. All of the top bank issuers have given up on it..  Perhaps their marketing/PR teams will say differently, but the guys running the P&Ls have already written it off.  The token efforts I’ve written about are very focused here.
  • History. Look at every other NFC launch.. ISIS can see it in their own pilot…  I was paying with Google wallet at the Duane Reed in front of Penn Station. There were 5 cash registers lined up.. 5 cashiers, one manager overseeing all of them. Manager asked me “is that Google wallet”? I said “yes, but you must see this all the time since NYC was launch market and Goog subsidized all your terminals”, He said ” only one I’ve seen for 2 months and I work here every day”. Enough said.

Thoughts appreciated.

– Tom

5 thoughts on “ISIS National Launch”

  1. Insightful reasons why ISIS is getting it wrong and why SelfPay will win the day (with a solution that delivers a valuable consumer experience and gives merchants what they need – a welcome way to engage shoppers in the aisle where they shop not at the POS where they pay!)

    I have always believed that the key to unlocking broader adoption of mobile payments/commerce is to first focus on the consumer path to purchase and deliver a solution that gets out of their way – lets them discover, shop, pay and get rewarded for shopping anywhere and certainly in the aisle. Ditch the wait to pay; ditch the out of context offers and offer a solution that doesn’t require you to a) pick a carrier b) pick a smartphone model c) pick a bank d) pick a payment method! Ugh – who would do all that just to speed up the checkout line for the guy waiting behind me? It makes no sense.

    Instead you need a neutral third party platform that doesn’t carry the baggage or vested interest of any one channel member.

    On the other side of this equation sits the merchants. There had better be something in it for them. I believe a solution needs to give access to the shopper right at the moment of decision not at the point of payment and that engagement needs to be personal, relevant and in context with where the consumers head is at – right at that moment – not the next day.

    Do this and you have a winner. This is what I have been focussed on for the past 18 months – can ‘t wait to bring it to the market so we can finally talk about what is working!

    1. “…access to the shopper right at the moment of decision not at the point of payment…” – great point; most of the banks and MNOs we deal with don’t get it. When I open my wallet at the till, there is very little (if anything at all) that can make me walk away to take advantage of some offers. And if the offer is linked to the checkout, that’s a waste of money – I already AM buying the goods and don’t need any further incentive.

  2. Many people believe ISIS will fail. I count myself among that camp. However, it would be great to see them continue to spend money raising the awareness of mobile payments. As the previous comment mentions, it seems important to focus on providing the users with value. I think that is best done by the content providers be it a retailer or a financial institution. I say that because at the end of the day your money has to come from some place, 99% of the time a bank, but money is only a means to an end.

    So we will see what happens…

  3. Brilliant post, Tom!

    99% of the players in the mobile payments field strongly underestimated the power (convenience, ubiquity, easy of use, simplicity, etc) of a humble plastic card…

    As for Apple and “payments as part of OS”, what interface would they use on iPhone to link to POS? How would that be different from ISIS, value-wide (consumers and merchants)?

    With regard to three pillars of m-payments, phone OEMs have a lot of issues to solve to make it work with transit:

Leave a Reply

Your email address will not be published.