For more than a year a large consortium of carriers, credit card companies, banks and fellow travelers, dubbed ISIS, have been slowly developing a mobile NFC-powered tap-and-pay system that was poised to come any day now. That day finally came this week… sort of. In a very limited test this week, the ISIS Mobile Wallet app “Alpha” appeared in the Google Play content market. Within hours, knee-jerk user responses to an app that is not really designed for widespread use yet suggested the dynamic that consumers and carriers may face as the old telecom guard takes on newbies like Google.
The app is supposed to aggregate one’s existing credit cards along with loyalty cards and mobile offers into a unified app experience. According to the explanatory video, payments, rewards and deals are integrated and simplified. T-Mobile and ISIS are leading with the safety issue, assuring users that their mobile wallet is more secure than a real wallet. Every transaction requires entering a PIN, and all the fraud protection afforded current cards is also present on the mobile wallet. A lost phone requires only a call to T-Mobile to freeze the wallet.
The app is provided by T-Mobile USA Mobile Commerce and it designed for a limited set of phones that apparently requires a SIM card upgrade to work. The handful of users who tried the device quickly erupted in the Google Play comments section, complaining that T-Mobile had blocked them from downloading the Google Wallet app so the company could promote its ISIS partnership. Moreover, they discovered when trying to use the app that it requires a SIM card that will include the “secure element” necessary to make secure, encrypted payments. Also, the test areas for this initial release are Austin and Salt Lake City.
T-Mobile is among the carriers issuing smartphone models with built-in NFC chips for contactless payments. This test app will work only with Samsung Galaxy S III/SII and Relay 4G models. And again, to enjoy the privilege of ISIS, current owners will need to bring their phones in to T-Mobile for a SIM card upgrade.
As this consortium of carriers nears official launch of the app, there are increasing signs that gloves will come off in fending off Google and its existing Android NFC payment solution. As T-Mobile’s move demonstrates, carriers may become heavy-handed in limiting user flexibility on an Android platform that staked its brand on openness.
For the last several years, the smartphone revolution has marginalized the carriers’ role in consumers’ choices in on-deck content and services. Now that key payment functionality involves the hardware these operators subsidize, consumers may get a taste of that old telecom corporate muscle once again. The carriers strike back -- but at whom? Google, Apple and upstart alternative mobile wallets? Or consumer choice?