Mobile wallet alliance

Isis was originally the brainchild of three individuals working for separate mobile network operators (MNOs). Over time, through interaction at industry events and discussions with leading U.S. retailers, card brands and issuers, the near field communication (NFC)-based Isis Mobile Wallet and Isis Mobile Commerce Platform moved from concept to reality. Isis launched nationwide in November 2013 after completing a pilot program in two cities and at over 4,000 merchant locations.

At launch time, the Isis Mobile Wallet also became available to consumers as an option on current-generation smartphones sold at over 20,000 wireless store locations. All combined, Isis joint venture partners AT&T Mobility, Verizon Wireless and T-Mobile USA service about 75 percent of the U.S. mobile phone market.

"When you get together and you have 250 million consumers out there, now you're talking something pretty interesting," said Tony Abruzzio, Business Development Executive at Isis. "That's what caused the three to get together. People don't want an AT&T wallet, a T-Mobile wallet, a Verizon wallet and all these other wallets. They tend to want to make their life simpler and easier, and you can't do that if you have tons of wallets on your phone."

As of February 2014, Isis contactless payments could be made at more than 200,000 retail locations supported initially by card issuers American Express Co., through its traditional or reloadable prepaid American Express Serve programs; JPMorgan Chase and Co.; and Wells Fargo & Co.

Acquirer and merchant friendly

Since the MNOs do not process merchant payment transactions, Isis does not compete with acquirers. "We don't get any revenue whatsoever on the acquired side of the transaction," said Abruzzio. Instead, Isis provides consumers access to smartphone payments at merchants who display the Isis contactless symbol. Card credentials are transferred from smartphones equipped with an enhanced secure element to POS devices via a small radio receiver transmitter.

"We're offering a way for acquirers to bring merchants into the modern era of mobile payments and continue to participate in the revenue stream just as they've always done," Abruzzio said. "We're not a disruptor as other models are in terms of the acquired revenue stream. We're not in that mode whatsoever."

In addition, Isis Mobile Wallet transactions are considered card-present by the card brands. "So it's not a downgraded transaction," Abruzzio said. "It's a face-to-face transaction, and therefore it falls under the same rules that a mag stripe would. All the chargeback rules and fraud rules are exactly the same for contactless as they are for mag stripe."

Furthermore, Abruzzio noted that Isis Mobile Wallet payments offer security protection not inherent in mag stripe: not only are transactions PIN-protected, the wallet offers freeze protection and protective identification features. For ISOs encouraging their merchants to meet the October 2015 deadline for migration to the Europay/MasterCard/Visa (EMV) chip standard in the United States, Isis is also EMV-ready.

"You can pay with an EMV card on Isis wallet when EMV comes," Abruzzio said. "We don't have card credentials sitting in the cloud somewhere. The card credentials are sitting at the issuer, and they get pushed down into a secure element on the phone, basically an electronic safe, and the transaction has some dynamic features that make it more secure than mag stripe." With Isis, the three-digit card verification value code is dynamically rotated with each transaction for added security that is compatible with existing card brand capabilities, he added.

According to Abruzzio, Isis plans to develop mobile commerce pilot programs with a select combination of merchants and acquirers during 2014 to evaluate Isis' mobile commerce capability with the acquiring industry serving as a distribution channel. Isis has begun to integrate with POS device and payment processing partners through the Isis Alliance Program, which is an excellent option for anyone interested in deploying a mobile commerce solution, Abruzzio added.

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