Isis mobile payments venture signs major credit card deal

Isis – the mobile payments joint venture from AT&T, Verizon and T-Mobile – has signed up four credit card companies, potentially pushing it ahead in the race with Google Wallet.

The deal means that Isis phone users will now be able to make payments automatically using credit cards from American Express, Discover, MasterCard and Visa.

Card details are stored inside the phone and communicate with a retailer’s point-of-sale device via a near-field communications (NFC) chip. Users simply wave and pay.

NFC is particularly attractive for retailers as it allows them to target customers more directly, with personalized offers and the like.

Isis plans a limited launch next year, in Salt Lake City, Utah, and Austin, Texas, in which all four credit card companies will participate.

Both Google Wallet and Sprint’s own near-field communication service work only with MasterCard. Sprint says it’s aiming to launch by the end of the year; Google Wallet, which has support from Sprint, MasterCard, Citi and First Data, is already up and running – but only in a small fraction of retailers, and only on the Nexus S 4G phone.

A recent report commissioned by MasterCard showed that the majority of smartphone users are ready to embrace NFC payment systems. And a study from analyst firm Juniper Research concluded that NFC-based mobile transactions will reach nearly $50 billion worldwide by 2014.

But, warns Juniper analyst David Snow, choosing which operator to go with could be a difficult call.

“Do I go with the mobile operator who I trust with my calls and data or with the financial organisation who I trust with my money?” he says.

“It’s difficult to know how people will vote, but vote they will and it won’t be for more than one – all the wallet propositions promise to be all you need, and do many people have more than one physical wallet?”