ISIS, a joint venture competing with visa & mastercard
Three major mobile providers AT & T, Verizon and T-Mobile are partnering to create ISIS, which is a new mobile commerce platform that is looking at a new way of replacing the wallet with the phone. These 3 carriers are building ISIS as a point of sale system which will need mobile cards and not credit cards anymore. The network would be using smart phones along with near field technology in order to make mobile payments possible and this groundbreaking service is likely to be launched in 18 months. A former GE Capital Executive, Michael Abbott has been appointed as the CEO of this joint venture, ISIS. In order to make contactless payments, something of a possibility, Barclays Plc and Discover Financial Services have also been brought in to the camp.
High frequency, short range wireless technology is used by the near field technology called NFC to ensure that messages in encrypted form are transferred between the mobile phone and the point of sale system. Michael Abbott sees this only as a start and told that ISIS is planning to create a mobile wallet which will ultimately allow consumers to get rid of cash, credit cards, reward cards, coupons and transit passes. The technology uses RFID technology or radio frequency identification, where a chip inserted inside or an antenna will allow customers to just wave the card or the mobile phone over the scanner present at the point of sale system.
This collaboration, in all likelihood will challenge the current market domination by MasterCard and Visa, by providing an alternative way of payment. This way, retailers will be saved the transaction fee which they need to pay to MasterCard and Visa. Currently the payment processing network is more like a grid with various players facilitating payments including banks, settlement houses, clearing houses and point of sale systems. Some elaborate coding which is taken care of entities like PayPal, IP Commerce and Amazon, needs to be done in order to provide alternative means of payment. These companies have to expose their API layers in order to help other programmers to make some groundbreaking applications in order to facilitate payments.
Vendors can bypass the whole system with new devices which will be connected via Wi-Fi and thus get rid of the cost involved in paying a percentage to MasterCard and Visa, which will now have to come with more value added services to get ahead of the threat.
