AT&T, Verizon, T-Mobile Team Up for Mobile Commerce
Three of the country's top four wireless carriers, normally fierce rivals, have teamed up on a joint venture to develop a common nationwide framework for mobile commerce.
The new payment platform, dubbed Isis, is slated to begin rolling out in major markets over the next 18 months as principals (AT&T: T), Verizon Wireless and T-Mobile promote the service to their subscribers and scramble to sign up merchants through their financial partner.
"While mobile payments will be at the core of our offering, it is only the start," Michael Abbott, CEO of the new venture, said in a statement. "We plan to create a mobile wallet that ultimately eliminates the need for consumers to carry cash, credit and debit cards, reward cards, coupons, tickets and transit passes."
Abbott previously served for nearly a decade with GE Capital where he focused on the retail sector.
The new venture seeks to jumpstart the long-hyped but lackluster domestic market for mobile payments, marked by many false starts and failed ventures that have been unable to emulate the success that the sector has seen in other countries, particularly in Asia.
The announcement comes just a day after Google (NASDAQ: GOOG) CEO Eric Schmidt previewed a smartphone believed to be the Nexus S at the Web 2.0 Summit, talking excitedly about the device's potential as a payment platform.
Schmidt predicted that near-field communication technology (NFC), which uses high-frequency technology to encrypt and send a message over short distances, would eventually come to replace credit cards as Americans' preferred payment method.
NFC chips provide the technological backbone of the new Isis venture. Participating consumers will be able to make point-of-sale purchases simply by tapping their phone, with the payment linking to a credit-card or other bank account, with the carrier assuring that rigorous security and privacy protections will be provided.
The three carrier partners collectively boast more than 200 million U.S. subscribers, who will all have access to the Isis service once it is deployed. Isis is partnering with Discover Financial Services to spread the service across its payment network, comprised of more than 7 million merchant locations.
Barclays' Barclaycard U.S. has signed on as the inaugural mobile payment issuer, though Abbott said Isis aims to expand rapidly its partner lineup.
"We believe the venture will have the scope and scale necessary to introduce mobile commerce on a broad basis," he said. "Moving forward, Isis will be available to all interested merchants, banks and mobile carriers."