Discover battles skeptics in Isis rollout

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Discover Financial Services’ strategy for implementing its mobile wallet m-commerce vision includes deploying an NFC mobile payment system to boost transactions processed over its Zip contactless payment network and rolling out contactless payment stickers to Discover Card holders.

If successful, the Isis mobile payment system joint venture (MPW 156) could yield sizable revenues within five years, says Discover CEO David Nelms. Isis users will eventually be able to access the network upon entering participating establishments by placing their phone near a retailer or Isis acceptance tag to receive mobile real-time discounts, merchandise reviews, or to buy out-of-store products – writes Kit Shane.

Nelms says Discover will make more readers available and work with merchant partners to facilitate upgrades within the next year. Some say Discover’s flexibility could give it a competitive edge in the transition from plastic to mobile phones, and its generally friendlier connections with retailers give it a fair chance to outperform rivals associated with the large banks.

Aite Group analyst Gwenn Bezard also says Discover’s NFC solution is an improvement over Visa and MasterCard’s microSD cards, which are more cumbersome in comparison. However, some analysts say Discover lagging behind Visa and MasterCard has forced it to take innovative action such as Isis to make a bid for customers and transaction share, while its smaller network and lower retailer acceptance make it incapable of generating enough volume to steer payments to NFC phones alone.

The skeptics note that Isis’ success hinges on the participation of at least one domestic bank issuer, and analyst Bob Egan says that “in talking to large banks, I don’t see one today that wants to jump in the Isis bandwagon.”