You could almost hear a room full of executives face-palming themselves. At issue, in this theoretical boardroom meeting, was the fact that their digital payment system was named, well, "Isis."
Isis Wallet, which has the backing of AT&T, T-Mobile and Verizon, is an attempt to compete with mobile payments firms like PayPal and Google Wallet. The idea is that your smartphone, which you carry everywhere with you anyway, could be used to pay for goods and services at point-of-sale locations equipped with "near field communication," or NFC. This is "a form of contactless communication between devices like smartphones or tablets. Contactless communication allows a user to wave the smartphone over a NFC compatible device to send information without needing to touch the devices together or go through multiple steps setting up a connection." In other words, at a checkout equipped with NFC, you could wave your phone over the card reader to pay your bill. Your wallet would never need to leave your pocket.
Apple, currently bathed in the afterglow of introducing its iPhone 6, also unveiled recently its own NFC-compatible mobile payments system, Apple Pay. "With Apple Pay, iPhone users hold their phones up to near-field communication (NFC) terminals, hold their finger onto the device's fingerprint sensor, and the transaction is completed wirelessly," writes Thomas Halleck. "The NFC hardware is included near the top of the iPhone 6 and iPhone 6 Plus. ..."
Halleck goes on to describe NFC in general and Apple Pay in particular. "Credit-card numbers are never transmitted to a merchant who accepts the wireless payments, like Starbucks. Instead, Apple Pay sends a one-time payment number and security code, the company said. Credit cards can be added by taking a picture of one with an iPhone to add it to Passbook. In the U.S., Apple said that major credit-card companies such as Visa, Mastercard and American Express are all on board. Citibank, Bank of America, Capital One, Chase, and Wells Fargo were all announced as partners. On the retail side, McDonald's will be adding Apple Pay to its drive-thrus, and Whole Foods grocery stores and Staples are participating."
Credit card sales account for 200 million daily transactions in the United States (something like $12 billion). Mobile payments technology is the latest outgrowth of a trend that began with "tap-and-go" credit and debit cards. "Like their name suggests, they make purchases with a tap – instead of the oh-so-sluggish swipe by the cashier – saving precious seconds at the register," wrote Marcie Geffner in 2012. "The added speed promises to make fast food faster, check-out lines shorter, movie tickets a breeze. ... Tap-and-go cards, also known as wave-to-pay, tap-to-pay or contactless cards, contain a computer chip and antenna instead of the magnetic stripe on the back of traditional cards. The technology sends data wirelessly to a nearby terminal, completing purchases with a process called near-field communication, or NFC." The cards include better encryption technology that generates a security code for individual transactions, making them more secure than traditional magnetic-strip cards. The fact is, in a world where more and more data are moving "to the cloud" and smartphones are supplanting wallets, magnetic-strip bank cards are an obsolete technology.
That brings us back to Isis Wallet. The Isis Wallet app "ranked as the least-used mobile payments option in a Yankee Group report earlier this year." Already struggling to catch on compared to competing mobile payments systems, Isis Wallet was dealt a devastating blow by the rise of the Islamic State in Iraq and Syria (ISIS). The groans of Isis Wallet's management could be heard for miles: Their carefully selected brand strategy now evokes thoughts of this vicious Islamist militant group.
"This week," reports Henry Mance, "Isis Wallet ... announced it would change its name to Softcard to avoid associations with the terrorist group, which has beheaded two U.S. journalists in recent weeks." (Interestingly, Mance highlights several businesses in Oxford named for a stretch of the Thames River that is also called Isis. Some of these firms, too, may consider changing their name.)
"Although customers will see a new name and logo," writes Don Reisinger, "there will be no change in the way the service works. As before, customers will be able to store credit card information, loyalty cards, and coupons and offers, into the Softcard app and make payments from their devices without actually being required to take those cards out of their pockets."
The news also comes as competing mobile payments systems jockey for position in anticipation of widespread acceptance of this new way to pay. "The mobile wallet space has become hotly contested over the last couple of years," affirms Reisinger. "While several companies, including Google, PayPal, and others, have attempted to make a name for themselves in the space, no single firm has cornered the market. ... The lack of a leader in the mobile payments gives Softcard some flexibility with its rebrand. If Softcard was forced to change its name in a mature market, it might have had difficulty educating consumers on the change. Instead, its just one new name in mobile payments – a market that has yet to reach critical mass."
The newly branded Softcard immediately took steps to establish its relevance by announcing its cooperation with Apple Pay, even though the two are competitors. Harrison Weber, reporting for Venturebeat, says that Softcard is working with Apple to bring Softcard to the iPhone by 2015. "Apple's iPhone lends it incredible negotiating power, and the Softcard carrier-trifecta has notoriously fought against competing services like Google's Wallet." Weber quotes Softcard head Michael Abbott: "[The decision] by Apple to support NFC is very significant and sets the stage for rapid scale adoption of mobile commerce."
The popularity of smartphones has already changed the markets for digital cameras and wristwatches, two accessories many of us no longer carry because our phones can provide these services. As NFC becomes more widespread, your physical wallet, too, could become obsolete. Given the potential security concerns, it remains to be seen whether this level of connectivity is truly progress. The transition to mobile payments, though, is inevitable nonetheless.
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