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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
In the meantime, ISIS is working with merchants to recruit them to invest in NFC technology (readers at the point of sale, in addition to any necessary software), as the platform becomes available, in order to set up a system to accept mobile payments at their stores. Although ISIS is currently in discussions with some national retailers, Johnson emphasizes that the solution is intended for both small independent merchants as well as chain retailers. Consumers, he notes, would want to use the technology not only at a supermarket or electronics store, but also at a corner dry cleaner, or at other locally owned businesses.

"The thing that has been inhibiting growth for NFC is the lack of a business model, the lack of open architecture," Johnson says. ISIS hopes the platform it develops will be something that merchants, carriers, banks and credit-card companies can all use to build payment solutions. The system will enable a consumer to purchase an NFC-enabled phone from the mobile carrier through which they already have a contract, and to take the phone to a merchant and use NFC technology to load data, such as information related to that individual's customer loyalty account. The consumer can then utilize the phone as a payment device if the user loads bank account or credit-card account information from a participating bank, and the phone can also receive coupons wirelessly from participating merchants, via an NFC-enabled RFID interrogator communicating over a short distance with the handset's NFC chip.

Initially, ISIS is working with Barclaycard US and Discover Financial Services, so that the bank and credit-card firm will be able offer ISIS-based mobile payment services to early-adopting consumers of mobile services using NFC technology. However, ISIS intends to work with any bank or credit-card company that would like to use the platform. "We are welcoming any bank that wants to set up mobile payments using this platform," he says. "There's an open door."

When it comes to the phasing in of NFC-enabled phones, Johnson says, consumers can expect the mobile-payment technology to become available on phones very rapidly. Inside Contactless, a manufacturer of NFC RFID chips, has told RFID Journal that it estimates that only about 50 million NFC-enabled phones will be manufactured for sale worldwide in 2011. The three mobile carriers sell 100 million new phones annually, Johnson notes, which means their purchasing power will prompt handset manufacturers, over the next 18 months, to produce NFC-enabled phones in large numbers. "We've been working with multiple OEMs [original equipment manufacturers]," Johnson says, adding that ISIS fully expects the number of NFC-enabled phones necessary for the deployment of NFC payment solutions in stores across the country to be reached in the next 18 months, and in 2013.

"Today," Johnson states, "a trip to the grocer can include presenting a loyalty card, payment card and coupons." By the time a transaction is completed, a consumer will have had to submit cards, key fobs or paper coupons at least three times in order to pay for a product and receive the desired discounts. By 2013, ISIS envisions, shoppers at many stores will have all of those functions on their mobile phone, and will use a built-in NFC chip to complete a transaction with a single tap of the phone against a store's NFC reader.

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