UPDATE 2-Isis hooks up with four payment networks

Tue Jul 19, 2011 3:48pm EDT

Related Topics

* Isis in deals with Visa, MasterCard, Discover, Amex

* Still expects to offer service in 2012

* Sees 2012 launch with "handful" of banks

(Adds Isis comment, background)

By Sinead Carew

NEW YORK, July 19 (Reuters) - Isis, a venture of three of the top four U.S. mobile providers, plans to launch mobile payments services with major payment networks Visa (V.N), MasterCard (MA.N), Discover (DFS.N) and American Express (AXP.N), the venture said on Tuesday.

The venture of Verizon Wireless, AT&T Inc (T.N), and T-Mobile USA hopes to convince consumers to start using their mobile phones to pay for goods instead of plastic credit cards or cash.

Isis, which plans to kick off its service in the first half of 2012, will compete with Google Inc (GOOG.O) and No. 3 U.S. mobile service Sprint Nextel (S.N), which plan to launch services this summer.

Now that it has signed up the four payment networks, Isis expects to be able to more easily finalize deals with banks that issue credit cards, Ryan Hughes, Isis Chief Marketing Officer, told Reuters.

"It delivers a message to the banking community," said Hughes, who noted that banks needed to know that their payment network partners would work with Isis before signing up as partners for the service.

Which payment networks are involved in the service launch depends on whether Isis has been able to sign up the network's bank partners, said Hughes, who expects to have a "handful" of banks ready for its launch next year.

NEEDS BANK, MERCHANT PARTNERS

Participating banks need to invest in new technology to support a mobile payments and several have already done so, according to Hughes, who would not name bank partners.

Isis expects to make money from the service by generating revenue from their financial services partners and by offering merchants the option to link loyalty programs or coupon offerings to the Isis service, the executive said.

For example, instead of printing out a coupon found on a merchant's website, consumers would be able to click on an Isis button to have the coupon delivered to their cellphone. Then the coupon could be applied automatically during a mobile transaction in that merchant's store.

Hughes said merchants will be able to access an application interface to link their offerings with Isis.

While the company is still working on pricing for mobile payments, Hughes said he expects Isis to "take a small percentage of the cost of delivering" an ad or coupon to the Isis application.

In countries such as the United States, where most people have bank accounts and credit cards, analysts see easy-to-use electronic coupons and loyalty programs as the main way for wireless companies to convince consumers to pay with their cellphones instead of their credit cards.

Verizon Wireless is a venture of Verizon Communications (VZ.N) and Vodafone Group Plc (VOD.L). Deutsche Telekom (DTEGn.DE) unit T-Mobile USA has agreed to be bought by AT&T. (Reporting by Sinead Carew; Editing by Tim Dobbyn, Phil Berlowitz)

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