Isis’s Abbott Takes the Wraps off New App As Wallet Nears National Rollout

The carrier-controlled Isis mobile-payments system on Monday unveiled a new version of its application and predicted that about 30 million mobile phones will support the near-field-communication-based product by the end of 2014.

Speaking at an industry trade show in Las Vegas, Michael Abbott, Isis’s chief executive, demonstrated the new mobile app, which allows users to pay bills, send money, add funds to cards, and log into the online site for the card with a single sign-on. Users can access the new features by flipping to the back of a virtual representation of the card, where buttons occur for each function. “We’ve re-invented the back of the card,” Abbott told the audience at the Money2020 expo. “We’ve turned it into a living billboard .”

Two issuers are known to remain with Isis as the system gears up for a national launch following its pilot in Austin, Texas, and Salt Lake City. Abbott’s demo included both issuers, with cards representing American Express Co. and JPMorgan Chase & Co. being shown. With the Chase Slate virtual card, the demonstration showed how cardholders can use a technology called Isis Connect to access their card account without any additional log ins. Another issuer that had partnered with Dallas-based Isis, Capital One Financial Corp., said last month it will not continue with the product. Isis’s revenue is derived from fees issuers pay to be included in the wallet.

The new app also stores loyalty cards and allows the user to designate one to be automatically included with a payment card to complete a transaction and pick up eligible points. Similarly, offers the app receives are shown, allowing the user to pick one to accompany a designated payment card to earn a reward.

The new functions rely on a technology Isis calls Smart Tap, which it has been rolling out over the past several months to terminal makers. The companies account for about 95% of terminals made, according to Abbott. A corresponding technology called Smart Tags allows the app to pick up coupons and offers from media such as posters.

Abbott said the next-generation app will roll out in a matter of weeks. He added that more than 40 mobile-device models now include the NFC chips necessary for Isis to work at the point of sale. The carriers backing Isis—AT&T Mobility, T-Mobile USA, and Verizon Wireless—have enabled about 22 million phones to work with Isis, with some 30 million expected by the end of next year, Abbott said.

While Isis’s experience with merchants in the two-city pilot was uneven, the Coca-Cola Co. was sufficiently impressed with the results at its vending machines in Austin to expand acceptance to more machines, said Rick Kanemasu, an executive heading up Coke’s vending technology strategy, in a separate presentation at the conference. The company has enabled “tens of thousands” of machines for Isis acceptance, Kanemasu said. Of some 1 million Coke machines in North America, about one-third are owned directly by the company rather than by bottlers.

The Isis-accepting machines, which are equipped with NFC readers, accept Isis wallets storing Coke’s My Coke Rewards card as well payment cards. As an incentive to use the rewards card, the soft-drink giant is offering the first three drinks free, with another free drink after buying 10. The wallet also allows Isis users to follow Coke. In the pilot, half of these users did follow the company, while 20% of these followers tapped their cards at the 200 Isis-accepting machines, Kanemasu said. Fully 90% of these followers were new to the Coke rewards program, he added. There are 20 million My Coke Rewards members nationwide.

“We’ve made a long-term bet on NFC,” Kanemasu told the audience. “We felt it was definitely the best consumer experience in terms of loyalty.”

Consumers, however, are likely to render the final verdict on Isis, says Rick Oglesby, a senior analyst at Boston-based Aite Group LLC who follows mobile payments. Consumer adoption of the Isis wallet remains a question mark, he notes.