The wireless carriers involved in mobile-payments venture Isis reportedly plan to invest more than $100 million into the project.
But this kind of revelation is just talk until AT&T Inc., Verizon Communications Inc. and T-Mobile USA actually have a product in the market that consumers can test and use, notes one observer.
"Until we start to actually see users in the market and we can understand what the user experience is, only then will the [investment] be more interesting," says Philip Philliou, a partner with the consulting firm Philliou Partners LLC in New York.
Isis also recently stirred the market when it signed Visa Inc., American Express Co. and MasterCard Worldwide to its system. It initially had a relationship with Discover Financial Services as its only card network.
Again, Philliou does not believe on the surface that those partnerships are significant. "The proof is in actually deploying the product and having consumers use it," he says.
But what the investment does show is continued interest in the project, Philliou says.
"The big risk in this kind of venture is if they lose interest or if one of the three partners splits off," he says. "I didn't think the dollar amount was as impressive as the fact that there is still unity and they still believe in Isis."
Isis plans to pilot its service in Salt Lake City and Austin, Texas, next year. The Salt Lake City test involves fare payments charged by the Utah Transit Authority. Consumers in Austin would use NFC-enabled smartphones to conduct purchases at participating merchants.
Bloomberg News reported the amount of funding from the telcos would depend on how successful Isis is at attracting banks and merchants to support the system.
Meanwhile, Google Inc. and its mobile-wallet concept continue to pick up momentum. The company recently purchased Motorola Mobility Holdings, which designs, manufactures and distributes mobile phones. All Motorola phones use the Google-designed Android operating system.
Google already has gotten Citigroup Inc., MasterCard, Sprint Nextel Corp., First Data Corp. and 16 merchants to partner on its Google Wallet mobile-payment scheme, which is still in test mode but will support contactless payments from NFC-equipped phones.
At the moment, Isis and Google are competing to determine which company can get to the market first with a product that works, Philliou notes.
"We want [to see the] product," he says. "We want to start testing it and using it and give feedback and get something that is really usable for in-store and online transactions."
