By Jim Daly
The Isis mobile-payments service on Wednesday said five specialty point-of-sale hardware makers would integrate Isis’s SmartTap technology into their products. The companies join a number of major POS terminal makers, including U.S. market leaders VeriFone Systems Inc., Ingenico S.A. and Equinox Payments, already committed to supporting Isis transactions in their new equipment as Isis prepares for a national rollout.
A joint venture of three leading mobile telecommunications firms, Isis uses near-field communication (NFC) technology to enable contactless payments with smart phones and support merchants’ loyalty programs and electronic coupons. SmartTap is Isis’s proprietary software that handles payments and loyalty and couponing functions.
Isis’s new partners are ID Tech, On Track Innovations (OTI) Global, PAX Technology, Uniform Industrial Corp. (UIC), and XAC Automation Corp. While none of them has nearly the U.S. market share of a VeriFone or Ingenico, they will enable Isis to reach merchants with payments and loyalty-program needs beyond those of a typical Main Street or mall retailer. For example, UIC provides hardware for vending machines while OTI serves transit clients. Last year, ID Tech bought the hardware assets of ViVOtech Inc., an early leader in the contactless and NFC payments market that went out of business.
XAC, based in Taiwan, makes a variety of POS equipment and peripheral devices for banks and merchants, including the gaming industry. PAX is a Chinese POS terminal maker that is building up its U.S. business.
“With these additional providers we’re tackling brand-new space,” Isis chief sales officer Jim Stapleton tells Digital Transactions News. “It expands the industry verticals. This allows us to expand into vending, transit, and other unattended point of sale.”
While anecdotal reports suggest Isis didn’t get many transactions at local stores in its recent tests in Salt Lake City and Austin, Texas, unattended merchant locations such as vending machines were a bright spot. The company has partnerships with Coca-Cola and vending- machine payments network operator USA Technologies Inc. “We’ve seen amazing volume” at vending machines, says Stapleton. “It has been absolutely one of the top use cases for consumers in frequency and volume.” He adds that volumes were good on the Utah Transit Authority public-transportation system in the Salt Lake area.
Regarding the national rollout, an article in an upcoming issue of Digital Transactions magazine says the company will be partnering with an undisclosed sandwich chain. Stapleton would not comment about the rollout.
Meanwhile, the new and existing partners represent 90% or more of the U.S. POS terminal market. Besides VeriFone, Ingenico, and Equinox, earlier partners include fuel-pump technology providers Gilbarco Veeder-Root and Wayne, and integrated POS equipment suppliers such as Micros and Toshiba.
Simply because a POS equipment provider has a deal with Isis to distribute the SmartTap software specification doesn’t mean a merchant with new equipment from that vendor can automatically accept Isis transactions. Not all terminal models will support Isis, and in addition to having a contactless card reader, the merchant would need to activate the SmartTap feature on an enabled terminal either by itself or, in the case of most small merchants, by instructing its independent sales organization or POS services provider to do so. “That becomes a merchant-by-merchant decision,” says Stapleton.
Stapleton didn’t have figures on hand as to how many merchants have activated SmartTap, but he says about 2,000 locations in the Salt Lake and Austin areas accept contactless payments. With the national rollout at hand, Stapleton cites Aite Group LLC research that projects 1.3 million U.S. locations will accept contactless payments by year’s end.
Payments consultant Steve Mott of Stamford, Conn.-based BetterBuyDesign says Isis is doing what it should be doing to build merchant acceptance by teaming up with POS technology providers. But its ultimate success still depends on individual merchant decisions to upgrade their terminals, which are not guaranteed despite the card networks’ current programs to convert the U.S. from magnetic-stripe payment cards to Europay-MasterCard-Visa (EMV) chip cards. EMV proponents expect the conversion also will boost NFC-based mobile-payment systems such as Isis.
“The question is whether the merchants are going to be willing to upgrade to NFC and contactless,” says Mott. “It’s such a complex decision, and there really is no ROI [return on investment]” in converting from a mag-stripe terminal to an EMV device.
Isis is a joint venture of AT&T Mobility, Verizon Wireless, and T-Mobile USA.