In a major shift, Isis, the mobile payments venture headed by AT&T, Verizon Wireless and T-Mobile USA, which originally intended to compete with card issuers, now appears to have abandoned that tack, opting instead for a scaled-back effort that essentially amounts to data mining and revenues that might be built on sharing access to such data in some way.
The shift means an end to the ‘clash of giants’ theme that had AT&T and Verizon challenging Visa and MasterCard directly as a payment processor. What new ‘story’ might emerge remains unclear, for the moment, as Isis now will embark on a search for a new narrative.
Some will note that the shift in strategy solves one problem, but creates others. Isis no longer has to spend the time and capital to create a new retail payments brand, a prospect many had pointed out would be time-consuming and expensive. But the new model also must define and then create a viable new revenue model of some size and scope.
There are huge new uncertainties. Despite the obstacles, the original plan had the advantage of a clearly-defined source of revenue, primarily based on per-transaction fees.
Now Isis has to search for both a sustainable role and viable revenue streams to match. In a real sense, Isis is “back to square one.” It has to uncover, discover or otherwise create a new role providing value, and hence revenue.