February 23, 2012
The Isis mobile wallet, set for release in two U.S. cities this summer, will feature a prepaid card with cash already loaded and a capability to “follow” participating merchants to receive coupons and other offers. The broad outlines of how the wallet will work were disclosed on Wednesday as Isis officials gave a demonstration of the product to software developers and terminal-manufacturer executives in a meeting in Austin, Texas, where one of the two test launches will take place. The other launch is set for Salt Lake City, Utah.
One potentially powerful marketing tool that won’t come with the wallet, at least in its initial release, is location-based services, a technology that lets users’ smart phones alert merchants when the user is nearby. The alert can then trigger an offer to entice the user to come in to the store. “It’s an area we’re treading lightly in,” Jim Stapleton, chief sales officer at Isis, told the audience. He said Isis fears the offers could be viewed by consumers as intrusive, particularly if they become numerous. “It’s wise not to venture into this until the consumer is comfortable and feels in control,” he noted.
A future release of the wallet will let users generate a list of nearby participating merchants on their screens, however, Stapleton said.
As for payments, Isis will load each phone with a “cash account” from the start, Stapleton said, to stimulate immediate usage. Rival Google Inc. deployed a similar tactic when it launched its Google Wallet commercially last fall, loading $10 into each prepaid account until the end of the year. “The first money [users] spend won’t be their own,” Stapleton said, without specifying how much value the accounts will come with. Consumers will then be able to load other cards from participating issuers, which will be expected to pay a fee to Isis for space on the wallet. Isis will announce its first participating issuers some time in the coming weeks, officials at the conference told Digital Transactions News.
Dallas-based Isis, launched in 2010 as a joint venture by carrier titans Verizon Wireless, AT&T Inc., and T-Mobile USA, has already reached agreements to support the contactless-payment products from American Express Co., Discover Financial Services, MasteCard Inc., and Visa Inc. Like competing products from Google and Visa, the Isis wallet depends on near-field communication (NFC) technology to transmit payment details from handsets to point-of-sale readers and to allow phones to receive offers.
In interviews with Digital Transactions News, Isis also disclosed that it plans to have about 1,000 merchant locations supporting its wallet in each of the two launch cities from the beginning of the tests. The two-city “soft launch,” as Isis officials characterize it, is expected to start some time in July.
To make it easier for consumers to add their cards to the wallet, the phone will list participating issuers and walk users through the process of loading their details. The listing will also give issuers a channel to solicit applications from users who are not current cardholders and send offers to those who are, Stapleton noted. Similarly, a merchant directory will list all participating merchants and allow users to “follow” those from whom they’d like to receive offers, an opt-in process that mimics the popular “follow” process on Twitter, the social network. In a process called “Clip to Isis,” consumers will be able to load offer details directly from print media, posters, or online displays by scanning QR codes on the media.
Isis managers stressed they don’t expect their wallet product to suffer the same security issues that made headlines two weeks ago when a security firm discovered flaws in the Google Wallet. The more serious of the flaws would allow a hacker to generate the wallet’s PIN by getting root access to the phone’s operating system. In interviews with Digital Transactions News, the Isis managers pointed out that the Google vulnerability stemmed from the fact that PIN storage and verification take place outside the so-called secure element in the handset, the chip that locks down card credentials and other sensitive data. With Isis, they said, PINs would be stored and verified within this chip, which is often the phone’s SIM card.
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