Certainly, it is promising to see continued interest in NFC (and investment dollars behind it) within the US, but in this case the final product suffers from many of the same issues that have hamstrung Google Wallet. In general, each of these problems boils down to making the m.wallet too complex, cumbersome and restrictive to use. To have any chance of unseating cash and cards as the payment incumbents, a mobile payment solution—NFC based or otherwise—must be absolutely effortless to use. Convenience and ease-of-use are among the top evaluation criteria cited by consumers in VDC’s most recent mobile payment survey. If an m.payment solution requires more customer effort than taking out a wallet, we see little chance of it being successful.
In regards to being convenient and easy-to-use, ISIS is anything but. Adopting the m.wallet requires a consumer first to visit one of their MNO’s stores to obtain a special SIM card—regardless of the fact that many of the handsets supported by the pilot have embedded NFC chips. This handset discussion conveniently segues to another significant problem with the ISIS pilot—handset support, or more precisely, lack thereof. Currently, between the three JV partners, about 10 smartphone models are supported, limiting the choices of prospective ISIS users—although that number is (supposed) to double by year’s end. Perhaps even worse than the limited device choices is the inconsistency across the JV partners—for example, ISIS is available on the Samsung GS3 with AT&T, but not Verizon. It doesn’t make sense to us, and we suspect the average consumer will also be confused.
While VDC believes in the concept of mobile contactless payment, we see the long-term viability of any m.payment solution being dependent on its ability to add value—both for the consumer and the merchant—relative to incumbent payment methods. If an m.payment app simply seeks to replicate cash or cards—or worse yet, makes payment more complex or restrictive—we see no chance of it gaining adoption.