Contactless proximity payments using near field communications (NFC) are attracting an increasing amount of attention these days. Currently, the two most widely-promoted NFC mobile wallets are the Google Wallet and the ISIS wallet. Both wallets are mobile applications that allow a consumer to securely store credit, debit and other card information on a special piece of hardware, accessible through a digital ‘wallet’ on a smart phone. The consumer is then able to “tap-n-pay” for goods and services at the point of sale, as well as potentially receive and redeem merchant offers. Skeptics of NFC mobile payments continue to emphasize the consumer and merchant adoption hurdles, but these don’t seem to prevent NFC proponents such as Google and ISIS from being bullish about the prospects for their respective NFC mobile wallets. By spring 2012, both wallets will have launched and will be competing for market share in the emerging mobile payments space. So assuming consumers are convinced that it’s cool(er) to tap-n-pay, which wallet will they choose? The chart below provides a side-by-side comparison of the Google and ISIS wallets as they stand today.
Google Wallet is a Google branded mobile wallet initially launched with partners Citibank, MasterCard and First Data. ISIS is a joint venture among AT&T, T-Mobile and Verizon. While the features of both wallets are largely the same, there are notable differences in approach. Having launched at the end of the summer of 2011, Google seems to believe the competitive advantage is gained by being the first to market notwithstanding any perceived use limitations. By contrast, ISIS has conceded the inaugural launch head start to Google and instead focused on growing its list of handset manufacturers and payment network partners prior to launch in the first half of 2012. Currently, the Google Wallet only works on the Sprint network with the Nexus S 4G handset. ISIS promises consumers ISIS wallet operability on a myriad of handsets and one can only surmise that the ISIS wallet will also be available on the networks of the three telecommunication partners – AT&T, T-Mobile and Verizon. Just last month, HTC, LG, Motorola Mobility, RIM, Samsung Mobile and Sony Ericson promised to introduce NFC-enabled handsets that implement the ISIS NFC and technology standards. But this is not a commitment to support ISIS per se because, according to the NFC Times, the ISIS NFC and technology standards follow global standards. There are also no commitments about when these handsets will become commercially available for purchase. Google has countered with a similar promise to ensure more handsets support the Google Wallet, and its purchase of Motorola Mobility may well put Google in a position to deliver on that promise at least as it relates to Motorola handsets. Both Google and ISIS are also making efforts to add NFC functionality to non-NFC phones, using NFC stickers, which would bridge the potential phone gap.
Another notable difference is the payment instruments supported by each wallet. Both wallets aspire to be “open” to payment instruments from multiple payment brands and banks. ISIS has recently entered to support the four major card networks Visa, MasterCard, American Express, and Discover, while the Google Wallet currently only allows a user to pay with a Citibank/MasterCard credit card, gift cards and a Google branded prepaid card. However, users receive a free $10 in the Google prepaid card account upon activation and can ‘top-up’ the prepaid card with any credit or debit card. Along with promises to support more payment cards and networks, Google envisions its wallet to be the keeper of more than just cards, eventually supporting boarding passes, event tickets, and keys. As far as unique features go, Google and ISIS have been touting different aspects of their respective wallet services. Google is heavily promoting its ‘Single Tap’ feature which allows consumers to purchase an item, redeem offers and earn loyalty credit with a single tap of the phone to a merchant’s NFC terminal. This is only available at select merchants. (See “Marquee Merchants” in the chart below). Without Single Tap, a Google Wallet user could pay with the Google Wallet wherever MasterCard Paypass is accepted but would need to show the offer to the cashier at checkout for redemption. ISIS has partnered with the Utah transit system to allow consumers to use the ISIS wallet to pay for transit fare by tapping an electronic fare reader on a bus or train platform. According to ISIS, this would be the first commercially available mobile transportation fare program in the United States.
Both Google and ISIS are counting on widespread adoption of their respective wallets – how many NFC wallets will the U.S. market support, or will consumers sign up and use more than one?UPDATE: Google teamed up with the New Jersey Transit to offer Google Wallet as a method of payment on all NJ Transit bus routes and rail lines in the Northeast. Currently the Google Wallet is accepted at New York Penn Station, Newark airport and select bus routes. Additionally, on November 16, 2011, 45 carrier members of the GSM Association endorsed NFC and committed to support NFC-based services. This commitment may not provide a competitive edge to either Google or ISIS but it provides the much needed buy-in by players that are pivotal to overall success in the NFC mobile wallet space.