Mobile Payment System in Salt Lake City by 2012
Paying for things with your cell phone could soon become a reality, at least if you live in Salt Lake City. That's where Isis, a coalition formed by Verizon, AT&T, and T-Mobile to bring mobile payments to the masses, plans to begin its rollout its platform early next year. Isis chose Salt Lake City because its transit system, run by the Utah Transportation Authority (UTA), is already equipped with near-field communication (NFC) - the key to any mobile-payment system. Both the customer's phone and the merchant's equipment must have NFC in order for it to work. In Salt Lake, half of that battle is already won. Just having NFC in the city's transit system is far from having a complete infrastructure, however. Over the next year, Isis plans to work with merchants in Salt Lake City so that when the service debuts, consumers will be able to use the system for more than just taking a bus or train. The Isis platform, which includes apps, payment integration, and other factors, is still baking as well, with Johnson describing it as still "in build." On top of that, there are scant few NFC devices currently available in the U.S. market. "The biggest challenge is working with the local merchant community to take the NFC infrastructure outside of transit and into everyday shops, and get to a critical mass." Isis is one of many efforts underway to bring NFC and mobile payments to the U.S. The technology is already common overseas in places like Japan, but it's had many false starts here. Sprint, the only major carrier not involved with Isis, is planning to launch its own mobile-payment system later this year. Both American Express and MasterCard are also spearheading efforts into NFC, and it's been rumored that Google and Apple are getting into the NFC game as well. Despite all the competition, Johnson says Isis brings to the table scale that the other players don't. Between the three carriers involved, Isis will be able to reach more than 200 million wireless customers. "Scale is essential," Johnson says. "For merchants to invest, they need to know there will be critical mass o the consumer side. For consumers to find it relevant, they need to know there's critical mass on the merchant side. The only way to solve that chicken-and-the-egg scenario is if you have a catalyst like Isis that can readily step forward with enough scale to ensure both sides of the ecosystem are going to be there. That's really what I think will separate winners and losers in this market." On top of that, the carriers can put pressure on phone makers to come to market with phones equipped with NFC, though so far there's little evidence of that happening. Nevertheless, Johnson says the carriers "are committed" to NFC handsets. Johnson says that Salt Lake City will be just the beginning. While many NFC pilot programs have come and gone in the U.S. with little to show for them, he says the 2012 deployment of Isis isn't a tentative "wait and see" launch. "Salt Lake is the first of many markets. We are committed to full commercial availability."
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