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The mobile carriers have negotiated for several years with the card networks to forge an agreement on a mobile-payment system for the U.S. that would rely on a technology called near-field communication (NFC), which enables interactive links between mobile phones and contactless readers and other devices equipped with NFC chips. Those negotiations have proved fruitless owing to disagreements over revenue sharing and other issues. Many observers see Isis as the carriers’ effort to create a mobile-payments system without the card networks.

But, as with any new payments network, Isis first and foremost will have to sign up merchants. While the new system’s wallet will offer merchant-friendly products like digital coupons, tickets, and receipts, observers say Isis will have to present better pricing. “I have heard nothing positive from the merchant community,” says Todd Ablowitz, president of Double Diamond Group, a Centennial, Colo.-based consultancy. “[Isis has] a great opportunity but they have to listen. They can’t think they know more than the merchant.”

Digital Transactions News, November 18, 2010