Swanson emphasized that Visa's approach is to give customers mobile access to their existing credit card accounts, not ask them to set up new accounts -- as they might have to do with Isis. "We want to give consumers access to the accounts they already have in their wallets, and we don't want to introduce friction as we roll out mobile payments so that people have to open a new account," she said.
To participate in the Isis Salt Lake City pilot, a customer would presumably have to register for a Discover card account backed by Barclaybank to use the network, unless Isis can get Visa, MasterCard or other credit cards and banks to cooperate with its endeavor, said Bob Egan, an analyst at The Sepharim Group.
"Technology is the least of anybody's worries with mobile payments in the U.S.," Egan said. "The real struggle is what the Isis business plan looks like. One of the continuing tensions in this industry is between issuing banks and alliances like Visa and MasterCard in how they redistribute wealth" from traditional credit card purchases -- and now from mobile banking.
Isis will probably attempt to forge relationships with the largest credit card companies, since Discover is either No. 3 or No. 4 and it's unlikely that many consumers and transit riders in Salt Lake City use its cards, Egan noted. Having Isis and its three wireless carriers involved in the Salt Lake City pilot only complicates the business model, he added.
"I doubt everybody is going to play nice in mobile payments in the U.S.," Holland added. "Success or failure ultimately depends on whether merchants uptake it and consumers embrace it, but getting to that point is not something you drop in place and suddenly it works."
Isis and Visa are not the first to be making moves to smartphone-based mobile payments in the U.S. Apple is rumored to be incorporating NFC technology into the upcoming iPhone 5, potentially giving customers the ability to use their iPhones to make payments at NFC terminals -- using funds from their iTunes accounts to pay for their purchases. Each iTunes account is already backed by a major credit card and an issuing bank, and that might give Apple an advantage over Isis, Visa and other companies planning mobile payment initiatives, analysts noted.
Sign up for Computerworld eNewsletters.