Johnson also said Isis believes that the secure element of transactions containing a user's personal information should be included in a smartphone's SIM card, a position maintained by many carriers globally but opposed by some phone makers, who want the secure element embedded in the phone or NFC chip.
That would mean that Verizon Wireless would need to sell all of its phones with SIM cards, Egan noted, since many models don't have SIM cards today. He said it isn't clear how much of a debate will develop over where the secure element resides, either in the phone, its NFC chip or the SIM card.
Johnson said Isis also hopes to provision NFC capabilities in smartphones, acting as what the industry calls Trusted Service Managers.
Egan said that the initial months of Isis seems to have taught the carriers a few things, including that retailers don't want to be bothered with working with a smaller card companies like Discover, which many retailers don't currently support, or to be required to support smartphones with NFC readers and compatible software.
"Retailers care about technology innovation only to the extent that it lowers their costs, raises their sales or reduces fraud," Egan noted. "Adding another card type, or moving people more quickly through the checkout with a phone meets none of those requirements."
Given that the Isis pilot is still far off, as well as the inherent complexities of creating a mobile payment system, Egan joined other analysts in concluding that NFC won't be coming any time soon, at in full force, to the U.S. "Card payments ... are complex, hard to build and monitor," Egan noted. "The process has just begun."
Avivah Litan, another Gartner analyst, said that in light of today's Isis reports, "NFC technology is ready in the lab, not on phones, but mobile payments are all about the business model, not technology."
"Isis shows that if you want to go it alone, you won't succeed. You can't expect merchants and consumers to work with one bank. You can't force anything down anybody's throat," Litan said.
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