Is Isis Keeping You  Up at Night?

Major players are building a mobile-payments platform.

April 15, 2012

I was at the Credit Union Reality Check conference in Atlantic City, N.J., at the end of February. Two of the speakers—John Lass, senior vice president of strategy and business development for CUNA Mutual Group, and Mark Sievewright, president of Credit Union Solutions at Fiserv—both mentioned something called Isis.

They referred to Isis in the context of disruptive technologies that should keep credit union CEOs up at night. In that same context, they also referred to events that were—at that time—currently underway in Barcelona, Spain. 

Isis and Barcelona? What could an organization called Isis and events taking place in Barcelona possibly have to do with credit unions? As it turns out, quite a bit.

Isis was created in 2010 as a mobile payments joint venture between AT&T, T-Mobile, and Verizon Wireless. In 2011, Isis announced it had reached an agreement with all four payment networks—Visa, MasterCard, Discover, and American Express—to make mobile payments a reality for millions of U.S. consumers and merchants.

Isis was again in the news a couple of months ago, announcing it had formed a partnership with several large banks, including Chase and Capital One.

Isis’ relationship with all four payment networks means that, with Isis-enabled phones and payment terminals in place, merchants and consumers will have abundant options when it comes to payment network acceptance.

So that’s Isis. But what’s with Barcelona?

It turns out, Barcelona hosts the annual Mobile World Congress (MWC), held this year during the last week of February. This is a global showcase for all things mobile.

The buzz at this year’s MWC had to do with newly formed partnerships that will enable mobile payments. Visa, for example, announced a partnership with Vodafone to make its Visa PayWave application available to third parties so it can be incorporated into various services, such as Google Wallet in the U.S.

The pieces of the mobile puzzle gradually are coming together. Progress, however, has been slow because it requires deals between companies that aren’t used to working together, like wireless carriers and megabanks. But both industries, if they want their share of the transaction-fee bounty, will have to cooperate.

Time will tell whether this is part of a gradual evolution in payments or something much more disruptive that could structurally alter the financial services industry as we know it. And if it’s the latter, where will credit unions fit in the new world order?