Sprint and Isis in the NFC race
Isis, which announced its formation in mid-November 2010, is focused on bringing mobile commerce to Salt Lake City using mobile phones to make point-of-sale purchases through the use of near-field communication (NFC) technology. The Isis system will evolve to offer customers a secure and convenient way to pay, redeem coupons and store merchant loyalty cards, all with the tap of their phone. The Isis mobile payment program will roll out in 2012 and allow consumers to use their Isis-enabled mobile phones to make point-of-sale purchases at retailers across the Salt Lake City area and on UTA transportation.
UTA is a pioneer in contactless payments for transit in the US, having implemented a “tap on, tap off” system in early 2009 (cf. SIW 08-14). The existing system, which allows consumers to pay with their contactless credit and debit card by tapping an electronic fare reader on a bus or train platform, will allow Isis-enabled mobile phone users to pay using their phone.
Fuelling the race between mobile network operators, Sprint Nextel plans to start a competing service that also will use the NFC technology, which allows smartphones to make purchases by tapping them on or waving them near electronic readers in stores. Sprint Nextel is planning to make its NFC payments service ready before the end of 2011.
Sprint is planning to make its system an pen solution where consumers can use their phone in a variety of physical locations. "Because we’re allowing other brands and other institutions to participate, they can also tell their consumers that this is available on Sprint" said Kevin McGinnis, Sprint vice president of product platforms. Sprint could apparently open its NFC-enabled wallet to such brands as Visa and MasterCard Worldwide, which could bring in their banking customers to issue Visa payWave or MasterCard PayPass applications, respectively. Unlike Isis, Sprint says it does not plan to take a percentage of each transaction, and could instead share revenue from sales of coupons sent to its handsets. Users’ purchases will be billed through customers' regular credit-card statements.
According to industry analysts, about 150,000 US merchant locations are enabled for NFC contactless payments today, compared with about 6 million that accept traditional magstripe credit-card payments.