Isis Mobile Wallet Launches, Most Americans not Interested

Last week, Isis, the NFC-based mobile wallet initiative from a joint venture of mobile carriers, launched nationwide. It only works on smartphones with an NFC chip, which essentially excludes the iPhone.

While most people expect mobile payments to become mainstream at some point, the outlook for Isis in particular is murky at best, if new survey data from Harris Interactive are reflective of general public opinion. 

Harris Interactive surveyed 2,577 US adults in September about their attitudes toward "mobile payments," generally. Scenarios described in survey questions included Square-like smartphone card swipes and "tap-to-pay" NFC systems. Broadly the firm found that more Americans were exposed to and had used some form of mobile payments vs. previous years.

A majority of respondents said they believe that mobile will replace cash and card payments "within five years." However a substantial minority (34%) believe that NFC systems (tap-to-pay) will never become mainstream. Among those who expressed a lack of interest in mobile payments, a "lack of compelling motivation" was cited as the main reason:

Among those not interested in using a smartphone to process payments, a simple lack of compelling motivation remains one of the top factors impeding interest, with 53% saying they don't see any reason to switch from cash or payment cards. This also holds true for smartphone users where a majority (58%) don't see any reason to switch from cash or payment cards either . . .

Simply put, large numbers of people don't see mobile payments, especially NFC-based approaches, as solving a problem. The people behind Isis are conscious of this and are trying to overcome consumer indifference by offering discounts, coupons and cash-back rewards for using it. For example, Amex is offering a 20% cash back award (up to a maxium of $200 total). 

However before Android (and Windows Phone) owners can start using Isis they'll need to get an enhanced SIM card. Then they need to download and install the app. Then they need to find merchants with NFC-enabled point of sale systems. 

The Harris survey data also reflect that interest in mobile payments in the US has fallen somewhat since last year. Security remains a top concern among a majority of survey respondents: "62% listed the fact that they don't want to store sensitive information on their phone as a reason for lack of interest."

Still the fact that most people believe mobile payments in some form are inevitable means there will eventually be consumer acceptance and adoption. As we've argued before the entry point for mobile payments is not these broad "horizontal" payment platforms but "point solutions" and vertical scenarios featuring a stored payment card (e.g., Uber, Amazon, Starbucks, AirBnB, OpenTable, parking, etc.). 

In such situations the convenience and efficiency of paying with an app are obvious to the end user. Indeed, the missing "compelling motivation" is present. Those vertical payment scenarios or point solutions will be the ones that familiarize people with mobile payments, ultimately paving the way for more horizontal payment systems. 

The question for Isis is whether it can survive until that day comes or whether it will have to change its approach or otherwise broaden its capabilities to attract more users, especially iPhone users.