AT&T, T-Mobile and Verizon Form ISIS Network for Swipe-and-Pay Phones

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You already use your smart phone for everything. Why not use it to make purchases too?

AT&T, T-Mobile, and Verizon  recently announced a partnership with Discover Card and Barclaycard to do just that. The alliance between carriers and credit card companies forms ISIS, a nation-wide commerce network that lets users make purchases by waiving their smart phones at checkout points in retail stores.

"While mobile payments will be at the core of our offering, it is only the start," said Michael Abbot, the chief executive officer of ISIS. "We plan to create a mobile wallet that ultimately eliminates the need for consumers to carry cash, credit and debit cards, reward cards, coupons, tickets and transit passes."

That mobile wallet will require each carrier to manufacture new cellular devices with Near Field Communication technology baked-in. NFC tech could be added to existing cell phone components like microSD or SIM cards, or it can be built into other parts of the device. Once added, it will allow the handset to interact with a receiver connected to a merchant or retailer's cash register system.

Discover card customers will be among the first to connect their credit cards to smart phones via the ISIS network. No other credit card companies have enlisted with ISIS.

Another partner is Barclaycard, an issuer of customer loyalty cards offered by large retailers and a major credit card company (examples include Frontier Airline's MasterCard or BJ's Visa rewards cards). Because swiping a smart phone rather than a credit card is of thought to be of limited appeal to consumers in general, integrating loyalty programs into mobile payment functionality is thought to be a deciding factor in enticing more users.

This particular alliance of carriers, card companies, and issuers trails news and rumors that reflect a growing interest in mobile payment opportunities within the production chain of smart phones. Google CEO Eric Schmidt recently touched on the need for upcoming Android smart phones to support NFC technology, and there have been rumors that the next generation of the iPhone will feature NFC baked-in as well. In addition, last week Sprint detailed its plans for a mobile wallet that could connect American Express, MasterCard, Amazon, and PayPal payment options to the carrier's cell phone lineup.

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