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Nine months after the Isis mobile wallet launched in Austin, Texas, and Salt Lake City, usage among small merchants appears to be sporadic at best, despite considerable fanfare and promotion at the launch. But some of the factors blamed by merchants contacted by Digital Transactions News have little to do with the product’s merits, and some merchants remain enthusiastic about the technology.
And Isis continues to push its carrier-backed payment service. After months of relative quiet, the company last week unveiled an unusually rich consumer promotion, particularly for the wallet wars. Under the promotion, prospective users who download a virtual card from at least one of the three participating issuers and then use the wallet for the first time will receive a code for a $100 Amazon gift card. American Express Co., Capital One Financial Services, and JPMorgan Chase & Co. have agreed to let their cards participate in the Isis wallet.
So far, Isis claims 704 merchant locations equipped to accept its wallet in the Austin area and another 876 in and around Salt Lake City. These, however, are sites that have readers enabled to accept contactless card payments. It remains unclear how many have processed Isis transactions since the program went live in the two cities in October. A spokesperson for Isis did not immediately respond to questions from Digital Transactions News about usage and merchant acceptance.
Merchant acquirer Heartland Payment Systems Inc., Princeton, N.J., and Phoenix-based independent sales organization MobiSquad were actively installing contactless equipment for Austin and Salt Lake City merchants as late as December. In at least some cases, the devices were subsidized to the point of being free to the merchant.
Formed as a joint venture late in 2010 by AT&T Mobility, T-Mobile USA, and Verizon Wireless, Isis offers a mobile-payments system that depends on near-field communication, an interactive, close-range radio technology that lets handsets transmit and receive data such as card credentials. Card data are stored in a microchip in the phone called the secure element. A competing system, Google Wallet, is offered by Internet search giant Google Inc.
Both systems have been hampered by a limited range of smart phones equipped with NFC chips, though more models from handset makers have been introduced in the past year with technology. Apple Inc.’s popular iPhone, however, remains a holdout.
Merchants that have accepted at least some Isis transactions report usage is rare. “I haven’t personally noticed any kind of influx since the beginning [in October],” says Amy Gomez, bakery manager at Granite Bakery and Bridal Showcase in Salt Lake. She estimates activity has remained level at about 10 transactions a month. “I’m not disappointed, but it hasn’t taken off as [Isis] would have liked,” she says.
Gomez says this result may have more to do with the demographic makeup of her clientele than with the merits of the Isis service. “We tend to get an older crowd,” she notes. “The times it has been used it has been the 20s and 30s crowd.”
But Steve Wright, owner of High Point Coffee House in Salt Lake, says he decided not to install his reader after hearing customers express fears the transactions would somehow expose their card information. “I didn’t even hook it up,” he says. “People are afraid of it.”
Wright says he’s “not quite sure what’s going to happen” with Isis, but he adds that the outcome won’t matter to his store. “I don’t think it’ll affect me one bit,” he says, if he ends up not accepting a single Isis transaction, since he accepts conventional cards. “I just wish everyone would use cash,” he says.
Down in Austin, Mike Martinez remains an Isis enthusiast despite anemic usage. The co-owner of Ben White Florist Inc. says he doesn’t “want it to come across as a downer,” but “activity has been minimal.” He cautions that his shop isn’t a high-traffic store in the first place, with the exception of Valentine’s Day, when the customer count balloons to 800 from the customary 20 to 25 he sees on an ordinary day.
Martinez speculates that the Isis system may be a bit too advanced for the times. “They have an excellent product,” he says. “The people who have used it are cool with it, but maybe the technology is a little too ahead.” Unlike coffee-shop proprietor Wright in Salt Lake, Martinez reports no fears among customers with data security.
Isis has also signed some major merchants, including the Utah Transit Authority in Salt Lake, and has won acceptance at vending machines in the two cities. A spokesperson for the UTA did not return a call from Digital Transactions News seeking comment.
