Credit-Card Companies Sign Up With Mobile-Payments Venture
February 27 2012 - 11:19AM
Dow Jones News
J.P. Morgan Chase & Co. (JPM), Capital One Financial Corp.
(COF) and Barclays PLC (BARC.LN) will enable their customers to use
a mobile-payments service being developed by several wireless
carriers starting this summer.
The service, called Isis, will allow consumers to pay for goods
at stores by tapping their mobile phones against a merchant's
payment terminal rather than swiping a plastic card. Their phones
must be equipped with a technology called near-field communication,
or NFC, and a merchant must also have special readers to handle the
technology.
"Mobile commerce is more than a new way to pay," said Michael
Abbott, chief executive of Isis, said in a statement. "It's about
extending the relationships consumers enjoy with their banks and
merchants into a powerful and convenient new form factor."
Isis is a joint venture of AT&T Inc. (T), T-Mobile USA and
Verizon Wireless, which announced plans for the service in fall
2010. The technology is one of several services aimed at converting
consumers' smartphones into payment devices, an effort that
analysts say could help banks and merchants find new ways to push
promotions to customers but has been slow to catch on because of
questions about costs and security.
Google Inc. (GOOG) launched its own service last fall that
allows customers to load certain MasterCard Inc. (MA) credit cards
issued by Citigroup Inc. (C) into the software. Customers can also
set up a Google-branded prepaid account. The program, called Google
Wallet, works on some smartphones running Google's Android
operating system.
Visa Inc. (V), the largest credit-card processor, is also
preparing to roll out its own "digital wallet" that will let
customers pay for goods online using a user name and password
instead of typing in their credit-card numbers for each purchase.
The service, called V.me, could also be used in the future to make
in-store payments, Visa has said.
Isis said Monday that the three banks, among the largest issuers
of plastic cards in the U.S., would be making the service available
to some of their customers starting in the summer when it kicks off
trials in Salt Lake City, Utah, and Austin, Texas. A national
rollout is expected to follow that trial.
The software used to power Isis will be compatible with cards
bearing the logos of Visa, MasterCard, American Express Co. (AXP)
and Discover Financial Services (DFS), though the banks will have
the ability to choose which of their card products it works with,
said Jim Stapleton, chief sales officer for Isis. For consumers,
the aim for Isis is for customers to be able to use the existing
cards they carry with them today with the service.
"It is meant to emulate your leather wallet ... where you are
the editor-in-chief of what goes into the leather wallet,"
Stapleton said in an interview.
In addition to making payments, Isis also would enable customers
to load their loyalty-program accounts and merchant offers into the
software, Stapleton said.
A major hurdle that has held back such services is the lack of
available of handsets that contain the NFC technology needed to
transmit payment information to a merchant terminal. Several
handset manufacturers, including HTC Corp. (HTCXF), Samsung and
Research In Motion Ltd. (RIM.T), have said they are incorporating
the technology into their phones, Stapleton said. In addition, Isis
is also working with DeviceFidelity Inc., a technology company that
will offer microSD cards equipped with NFC that can be added to
some existing phones.
J.P. Morgan Chase plans to make it available first for its
credit-card customers, said Richard Quigley, president of Chase
Card Services at the New York-based bank.
"We're still working on exactly which versions will be available
when, but the idea is that this will be a very broadly available
payment mechanism," Quigley said.
Representatives of Capital One and Barclaycard, part of
Barclays, did not immediately respond to inquiries Monday.
-By Andrew R. Johnson, Dow Jones Newswires; 212-416-3214;
andrew.r.johnson@dowjones.com
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