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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.
"From a merchant perspective," Devlin says, "[the ISIS platform] places a requirement on them to install suitable contactless readers at the POS," that would work on that platform, and to compete with other merchants launching NFC systems to meet ISIS' deadlines. "Mobile coupons and loyalty programs can all be incorporated [all on one phone] to offer targeted programs to their customers." ISIS' mobile solution platform, he predicts, will bring an element of competition into the market, "between ISIS, the mobile service and the current card-based offerings"—such as those from Visa, MasterCard, and other credit-card service providers that charge a transaction fee—which will require the credit-card companies to determine such fees, as well as the level of service for any ISIS-based payment transactions processed. Each credit-card firm, including the first to participate—Discover—will determine the transaction fee to be charged, though ISIS is not yet providing details regarding what those fees might be.
Because ISIS membership carriers represent two different mobile-phone technologies—Code Division Multiple Access (CDMA) and Global System for Mobile Communications (GSM)—ISIS will also need its platform to accommodate both standards.
There are already millions of NFC-based RFID-enabled credit cards in circulation—including PayPass and PayWave—and hundreds of thousands of merchants that support them. As of the second quarter of 2010, MasterCard Worldwide reports, there are approximately 78 million PayPass cards and devices in use at more than 245,000 merchant locations around the globe. When it comes to payment networks and card issuers, Devlin says, "with partnerships between both Visa and MasterCard and various banks [in previous NFC trials]," these financial institutions have already displayed an interest in working with NFC technology to provide payment solutions. The use of existing NFC-enabled cards would not be affected by the ISIS platform.
Mobile-phone manufacturers are increasing their production of NFC-enabled phones for 2011 as well, including Nokia (see RFID News Roundup: Nokia Pledges All New Smart-Phone Models Will Come With NFC). During the Web 2.0 Summit, held this week in San Francisco, Google's CEO, Eric Schmidt, indicated that the next version of its Android phone operating system will support NFC technology. When Jim Balsillie, Research in Motion's co-CEO, was asked at the event if his company intends to incorporate NFC chips into future BlackBerry models, he responded, "We'd be fools not to have it in the near future... and we're not fools."
Michael Abbott, the former chief marketing officer for credit cards at GE Capital, has been named as ISIS' CEO. Abbott is a veteran financial services executive, with experience in the payment and technology industries.
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