Has Isis already lost the mobile payments battle?

Published: 11/16/2012

SubtleData has offices in Austin, Texas and partners in Salt Lake City, Utah. Both of these cities are the launching grounds for mobile payments provider Isis. We have been researching whether or not people are using Isis and the numbers are shocking. The typical response from the Austin and Salt Lake City “Technorati” (people who would be the first adopters of this technology) are pretty clear: not going to use it.

So why is it that the carriers were so mistaken in their forecasting of consumer trends?

We can look back to how the wireless carriers work. They buy exclusivity from specific brands to carry their products. Just look at AT&T’s deal with Apple. They purchased exclusivity to gain market share. What that did to the market was disenfranchise consumers from their wireless carrier because they were unable to purchase an iPhone. It wasn’t until years later that other carriers were able to offer the phones. The carriers just have a culture of planned difficulty when it comes to working with consumers.

Secondly, we asked the Technorati when they last went to their wireless carrier’s offices to speak with a live person. 85% of the respondents said not within the last 5 years, 10% not in the last 2 years and 5% within the last twelve months. The reason they explained was that they could work with the carrier online and over the phone. This system was designed by the carriers. Of course they would prefer to reduce their costs for consumer onboarding, so online is the perfect vehicle to do so.

So what does the fact that they haven’t been to an AT&T store in years have to do with Isis? Well in order to activate the mobile payments system Isis, the consumer is required to go to their carrier’s physical store location and stand in line and speak with a live person. The live person has to remove and replace a chip in their phone in order to activate the Isis system. The representative has to download new software on the phone as well. All of this defies the typical approach the carriers have had to consumer interaction.

We then asked the Technorati why they would use the Isis payment over the typical credit card. The answer was yet again clear: they wouldn’t. The overall sentiment was that pulling out an app while standing in a long line was going to take longer. Most of them had a password activated on their phone which would be required to access the device, then another 4-digit PIN to access the Isis application, then selecting a card from the list, then tapping the receiver was, as one respondent said “going to take 3 times longer than just using my credit card, and I won’t get glared at for holding up the line.”

Let’s boil all of this down. The mobile payments industry is heating up. Entrepreneurs are trying their best to solve the dilemma of mobile payments. The key message is clear. It has to be easy, painless, and fast. If it doesn’t have all three it will most likely have poor adoption.

Will Isis grow past Austin and Salt Lake City? Probably so. With all of the money spent on the program, the carriers cannot just upend the thing and go back to being carriers. They are now in the payment processing world and will probably regroup on what the next generation Isis mobile wallet will look like. The good news is that with the new Isis marketing campaign all of the Austin buses got a fresh wash. Thanks for cleaning them up Isis!

Tags: Isis   Austin   Salt Lake City   AT&T   Apple   iPhone  


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