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Mobile Carriers Launch Venture to Aid Adoption of NFC in Phones

In an effort to turn phones into wireless credit cards, AT&T Mobility, T-Mobile USA and Verizon Wireless intend to release software for handsets and payment terminals in select U.S. regions over the next 18 months, with a nationwide rollout planned by 2013.
By Claire Swedberg
Nov 17, 2010After two years of discussions, the three largest U.S. mobile phone carriers have launched a joint venture intended to develop a single platform on which technology based on the Near Field Communication (NFC) specifications can be used by their customers to make mobile payments. The new venture, known as ISIS, is designed to usher in the broad deployment of NFC technology, allowing NFC-enabled cell phones to function similarly to credit cards for the 200 million customers using cell phone service provided by any of the three carriers throughout the United States.

NFC is an RFID technology that can be used to enable the exchange of information between a passive 13.56 MHz RFID chip built into a cell phone or attached to a credit card, and a reader located at a store's point of sale. Participating merchants can allow consumers to use NFC-enabled cards and devices to pay for products, or to receive discounts or coupons via the transfer of data between the interrogator and their mobile phone or card. To date, the deployment of NFC technology in mobile phones has most commonly been in the form of pilots only, though NFC-enabled credit cards—such as MasterCard's PayPass, Visa's PayWave and Discover's Zip—have been issued to consumers in larger, full-scale deployments. The ISIS platform is designed for mobile phones only, and does not involve NFC-enabled cards, which will continue to be operated as they currently are.

ISIS has begun developing a software platform that can be utilized by customers of AT&T Mobility, T-Mobile USA and Verizon Wireless, as well as by merchants. The platform includes software to be used in cell phones with NFC technology, as well as a software upgrade for NFC readers at merchants' POS terminals. The first NFC-enabled cell phones sold by the three carriers and based on the platform are expected to be made available to consumers in some geographic areas of the United States within the next 18 months, ISIS has announced, with a full rollout to all regions nationwide slated to be accomplished by 2013.

The ISIS venture is significant, says John Devlin, ABI Research's principal analyst for smart cards and embedded security, not only because it will provide a single platform for merchants, consumers, financial institutions and mobile carriers to use with NFC payments, but also because "It sets a timeline for [mobile service provider] partners, suppliers... and competitors to work toward."

Merchants have been seeking a standard platform on which NFC systems can be based, says Jaime Johnson, T-Mobile's director of strategic development and a spokesperson for ISIS, rather than each purchasing NFC-enabled point-of-sale (POS) readers and software that may be incompatible with systems employed by other retailers, or by major financial institutions and mobile carriers.

"Merchants have been telling us [the carriers] we need commonality, a standard platform that merchants can invest in," Johnson states. To accomplish this, he says, the three carriers have been meeting for the past two years to discuss how to proceed. "Bringing together three competitors takes vigorous discussion to accomplish that collective head nod." Within the next 18 months, he adds, some mobile phone stores for each of the three carriers will offer NFC-enabled phones for mobile payments based on the ISIS platform, with all stores anticipated to provide the phones by 2013.

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