Rewards, Subsidies Help Spur Activity for Isis in Mass Transit And Vending

A little more than 90 days into its pilot, Isis, a mobile-payments consortium formed by wireless carriers Verizon Wireless, AT&T Mobility, and T-Mobile USA, announced on Tuesday at the 2013 Payment Summit in Salt Lake City that it has more than 10,000 merchant locations in Salt Lake and Austin, Texas.

Overall, active Isis users are making five transactions per week and following five merchants, on average, according to Jim Stapleton, chief sales officer for Isis.

In Salt Lake City, Isis users are generating the majority of the 1,000 daily contactless card transactions on the Utah Transit Authority, according to Jerry Benson, chief operating officer for the UTA. “Prior to the Isis pilot, we had about 400 contactless transactions a day,” said Benson, who adds the UTA generates about 130,000 daily transactions in total. “By the time the Isis pilot ends, we expect Isis users to account for between 1% and 2% of total transaction volume.”

Isis, which did not reveal how many users it has in the test cities, is incenting wallet users in Salt Lake City to ride the UTA by subsidizing their fare regardless of the route or distance traveled within the UTA system. The subsidy, which right now comes to about $1,500 a day, runs through March, says Benson. Isis extended the incentive to attendees of the Payment Summit, who can use their cards to ride UTA buses and street cars for free downtown during the conference, which is sponsored by the Princeton Junction, N.J.-based trade group Smart Card Alliance and ends Thursday.

Benson said he believes incentives and loyalty programs will help drive future consumer adoption of mobile wallets and contactless cards. “We see incentives and rewards as being part of what moves consumers, especially lower-income users, to contactless and mobile wallets,” Benson told attendees at the Payment Summit.

Salt Lake City was chosen as a test city by Isis in part because of the UTA’s acceptance of contactless cards, says Stapleton. Benson added that so far the majority of the travel done by Isis users on the UTA appears to be between home and work.

Ultimately, the UTA plans to use data gathered from mobile transactions to track rider behavior and improve service. Benson cited an example of one rider paying with a contactless card on new light-rail system between Salt Lake City and Provo, Utah, who stopped riding the system after nine days. “We are also seeing a jump in new riders, but the real value of the transaction data can help us learn more about how riders use the system, which is something we can’t do with cash,” he added.

In Austin, where Isis does not have a deal with the local transit authority, the company is playing up the loyalty/rewards angle. The Coca-Cola Co. has deployed 200 vending machines where consumers can automatically download loyalty points to, and redeem them from, their My Coke Rewards account loaded into their Isis wallet. Isis-enabled phones purchased in Austin come with a My Coke Rewards application. Isis users have the option of opening a new account or linking their existing My Cokes Rewards account to the wallet.

About 90% of the Isis users making use of the My Coke Rewards app are new to the program. “From a loyalty perspective, that’s the kind of activity marketers want to see,” says Stapleton, who declined to reveal how many Isis users are making use of the My Coke Rewards app.

Isis also has vending machines in the Salt Lake City Airport, though Stapleton refused to say how many.