The NFC joint venture between AT&T, Verizon and T-Mobile has fundamentally changed the way it plans to bring NFC to market. But that doesn't mean Isis is scaling back, the company's Jaymee Johnson has told NFC World. In fact, he says, "we are pretty drastically accelerating the scope of what we are bringing to market."
Just six months after its official launch, the Isis joint venture between AT&T Mobility, Verizon Wireless and T-Mobile USA has undergone a radical re-think of its business model. Jaymee Johnson, Isis' head of marketing sat down with NFC World last week to explain Isis' strategy, how it plans to offer value to banks, what the merchant proposition will be and how next year's Salt Lake City pilot is shaping up.
Isis' original plan, announced in November 2010, called for the venture to develop its own mobile payments service, in competition with the existing payments networks, and to recruit its own merchants for the new service.
Rather than competing with banks and payments networks, however, the new plan calls for Isis to work with the payments industry to enable US card issuers, brands and merchants to offer NFC-based services to the subscribers of Isis' founder mobile network operators.
That change of direction doesn't mean Isis is decelerating or scaling back, says Johnson. In fact, he says, "we are pretty drastically accelerating the scope of what we are bringing to market."
The idea, says Johnson, is for Isis to become the "connective tissue" between the payments, mobile and retail industries. "We're not building a discrete payments network," he added, nor will the joint venture be launching any Isis branded payments products of any kind. Isis is now "a B2B2C company."
Under the new plan, the Isis Wallet will be open to any card issuer, brand or merchant to use. Banks will also be able to use any trusted service manager (TSM) service they want. Isis, however, intends to become their TSM of choice by offering a single integration point that lets NFC service providers provision their customers' details onto NFC phones, regardless of which of the partner mobile network operators they subscribe to and what make and model of phone they have.
The venture is now developing provisioning systems that will allow existing payments services to be added to any NFC phone owned by a subscriber to any of the Isis founder's mobile networks, says Johnson — and Isis already has a number of banks ready and willing to pay for this service. "When we launch next year we will launch with multiple banks," he explained.
US banks have a "huge desire" to be 'top of wallet', he explained, so that they are the payments instrument of choice amongst their cardholders. Now, says Johnson, they want to extend their relationships onto mobile and "there's tremendous value" to the banks in being able to reach the majority of their customers by integrating with a single TSM service like Isis that can reach 80% of US mobile phone users.
For brands and merchants, Isis plans to offer an easy way for them to deliver loyalty and promotional campaigns to new and existing customers. The typical US consumer has 12-15 loyalty relationships, says Johnson, and Isis can provide product manufacturers and retailers with an easy way of moving existing loyalty programme membership cards onto mobile phones.
Subscribers will then be able to opt-in to receive coupons and messages from particular brands and merchants which Isis will deliver directly to customers' NFC phones. At merchant terminals, consumers will then be able to tap to pay, identify themselves as a loyal customer and receive/redeem coupons. They will also be able to tap in to a store to receive recommendations based on previous shopping habits.
This "fundamentally shifts where and how the dialogue can begin between the retailer or brand and their customers," says Johnson. Isis will provide the "opportunity to build a deeper relationship between retailer and consumer" and, as with the move away from building its own payments service, Johnson says that Isis is not "in the business of generating or sourcing the offers."
Will the new plan work? The first real opportunity to find out will be when the first Isis pilot goes live in Salt Lake City next year. That is set to see Isis "flooding the market with terminals" in retailers of all sizes, says Johnson, so that consumers can pay by phone for their everyday purchases. Isis' focus will be on 'transaction counts', ensuring that high volume merchants such as grocery and convenience stores, quick service restaurants and gasoline retailers are equipped first. The cost per point of sale is in the region of US$100, says Johnson, and how a contactless terminal turns up in a merchant will vary widely. Isis is looking at a range of options including free terminals, subsidies and other means.