The group of AT&T Inc., Verizon Wireless and T-Mobile USA has planned an investment in excess of $100 million for their joint venture which will let consumers pay wirelessly for purchases with their mobile phones, according to certain inside sources.
This investment is being considered a key ingredient in the showdown between this group’s venture, which is called Isis, and its competition such as the services for mobile payment being initiated by Google Inc.
The final amount of funding will depend on the success of Isis in attracting merchants and banks, according to one of the sources who preferred to remain anonymous as the financing is being kept private. The alliance has been created by the carriers to get a piece of the mobile commerce market, which will enable the users to make purchases of goods just by tapping their mobile phones against an NFC reader at the merchant’s checkout.
According to a leading research firm, the market for such wireless payments is expected to reach around $670 billion by the end of 2015. If the venture succeeds in gaining followers, the carriers could potentially invest hundreds of millions of dollars in it, said one of the persons, which will help it catch up with Google’s similar service which was unveiled this May.
According to an independent analyst named Chetan Sharma, the operators will eventually have to focus on creating the type of services which will derive value from more than just user access. He said that it is quite certain that people are going to increase their transactions over their mobile phones, and it potentially opens up an all new stream of revenue for the carriers.
Isis, which was formed last year, will also enable its customers to receive coupons on their cell phones and redeem them, in addition to letting them make payments. The service, which is expected to launch in a number of cities next year, will earn revenue by charging the marketers a fee for sending their offers to customers on their phones.
The head of Isis marketing, Jaymee Johnson, said in a statement that the alliance is right on track for a launch in key markets, which include Austin and Salt Lake City, in the period of early to the middle of next year. He, however, declined to make a statement about the funding of the service.
