While the social network isn’t doing away with its direct-sale initiative, it is focusing its attention on ads that drive consumers to retailers’ sites.
Their support for the Isis project means more NFC phones are on the horizon.
Grand plans to enable contactless payments with smartphones got a boost this week as seven device makers announced some of their upcoming products will support the Isis digital wallet.
Isis, the mobile commerce firm started by AT&T Mobility, T-Mobile USA and Verizon Wireless, says HTC Corp., LG Electronics, Motorola Mobility Inc., Research in Motion Ltd., Samsung, Sony Ericsson Mobile Communications AB will produce compatible handsets. In addition, DeviceFidelity Inc. will make secure digital cards with Near Field Communication chips supporting Isis technology. Consumers can use the DeviceFidelity cards in existing phones with secure digital ports to enable NFC. Secure digital cards are another form of data storage, typically used to keep photos or programs to run on a device.
Isis will rely on Near Field Communication technology to enable contactless payments. NFC enables two-way communication between NFC devices, such as for completing a payment by waving a smartphone near an NFC reader.
Ensuring consumers have enough handset choices is essential to Isis and its competitors, including Google Inc.’s Google Wallet, Visa Inc.’s expected digital wallet and eBay Inc.’s PayPal mobile payment service.
Isis expects to launch its service next spring, and by then, more NFC-enabled handsets will be available from these manufacturers, says Jaymee Johnson, Isis head of marketing. He says he does not know how many NFC devices will be available then because handset makers typically do not reveal that information.
Currently, the only available NFC phone is the Google Nexus S 4G phone on the Sprint network. Google activated Google Wallet last week.
Greater handset availability is essential to convincing consumers and retailers that mobile digital wallets are worth the effort, Johnson says. “It’s more about a retailer thinking there is going to be sufficient scale that he needs to make an investment now,” Johnson says. “Are there going to be enough customers coming through his doors with NFC devices and expecting to use them to pay?”
That is the underlying question Isis faces, says Rick Oglesby, an analyst at research and consulting firm Aite Group LLC. Isis is playing to its strong connections to device makers, whose customers are the wireless carriers, Oglesby says. “This is Isis building its foundation,” he says.