Isis is to put in place a fully open ‘TSM to TSM’ architecture, the company has told NFC World, so that banks and service providers — as well as Visa, MasterCard, Discover and American Express — will be free to choose their own NFC technology suppliers.
“Isis will have a TSM to TSM architecture,” the joint venture between AT&T Mobility, Verizon Wireless and T-Mobile USA explained to NFC World. “Isis does expect banks and other players to have their own TSMs” and both banks and payments networks will be able to simply connect their trusted service managers to Isis.
The move to a fully open architecture means that Isis has turned 180 degrees from its original position. Isis’ first 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.
In the second version of its business plan, unveiled in May, Isis switched to adopting a B2B2C role. This new strategy, head of marketing Jaymee Johnson told NFC World, meant that the company no longer planned to introduce any Isis-branded payments products. Banks would be able to choose their own TSM supplier to handle the complex task of encrypting and transferring sensitive customer data such as card numbers to customers’ mobile phones should they wish to, Johnson added, but Isis still intended to generate revenues from becoming their TSM of choice.
The new Isis that Visa, MasterCard, Discover and American Express have signed up to looks set to take this concept a step further still by providing a role for Visa and MasterCard, in particular, to play a fee-earning role in the Isis network.
Both Visa and MasterCard have developed NFC solutions that member banks can use to simplify the complex and expensive task of securely connecting the back office systems that store cardholder data to mobile network operator’s over-the-air (OTA) platforms.
Adopting a TSM to TSM architecture is likely to reduce both the firm’s role and the percentage of NFC revenues that Isis will receive. But it has also made it practical for the payments networks to build a business case for signing up to the service — and for the overall US NFC pie to become potentially many times larger.