Sunday, May 29, 2011

Why Sprint Chose Google Wallet Over Isis

Last November, one phone carrier was missing from the "Big Four" when three of America's biggest carriers aligned to form Isis, a mobile payment platform: Sprint.

Sneaky ol' Sprint. Turns out America's fourth largest carrier was being courted by Google to join a Google-led mobile payments ecosystem, Google Wallet, announced on Thursday. Google, Sprint, and a slew of other financial companies had suddenly formed a formidable competitor to Isis, which was, until then, perceived as America's best chance at making mobile payments widespread.







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On the fringe of yesterday's event, Fared Adib, Sprint's Vice President of Product Development (right), explained why Sprint shunned Isis for Google Wallet.

Sprint VP Fared Adib "The reason why we joined this group of companies was really its open philosophy, the ability to bring together multiple different players," said Adib. "Google had the credit card networks, the processors, merchants, everyone already signed up."

To clarify, it had one member from each of these industries signed up: Citi, MasterCard, Sprint, and First Data, to be precise. However Google stressed its desire to work with more companies. At the event yesterday, Stephanie Tilenius, Google's VP of Commerce, expressed interest in partnering with "iPhone, RIM, and Microsoft."

Adib said he was also excited by the immediacy of Google's plan.

"This is not just something we're testing two years from now in one city," he said, snubbing Isis' recent announcement about launching in Salt Lake City in 2012. "We're trialing it today and deploying it in the market very soon."

On the outset, partnering with Google puts Sprint in an excellent position, seeing that it carries the only phone that will be able to use the Google Wallet app when it launches this summer: the Nexus S 4G ($199 with contract, 3 stars).

Not even the original, NFC-equipped Google Nexus S phone on T-Mobile ($199 with contract, 3 stars), will be able to use it.

"Technically [T-Mobile's Nexus S] could be because it has the NFC chip, but T-mobile is part of Isis, so if they wanted to be part Google Wallet they would have to talk to Google too," said Adib.

Which highlights the limitations of Google Wallet: unless other companies agree to Google's terms of use, very few people will actually be able to use Google Wallet—and only if they buy that particular Sprint phone. Sprint hasn't released sales figures of the Nexus S 4G (and Adib would only say that it's been one of Sprint's top-selling products to date) but presumably it's sold far less in its first three weeks than, say, the three million iPhone 4 units AT&T sold in the same amount of time last year.

And of those Nexus S 4G owners, what percentage also use a Citi MasterCard credit card and shop at American Eagle Outfitters?

Until more carriers, phones, banks, and merchants join Google's ecosystem, there may yet be plenty of catch-up time for Isis, which declined to comment for this story. "When we launch next year consumers will be able to choose from multiple NFC handsets, from multiple operating systems, and from multiple manufacturers," Jaymee Johnson, Isis spokesman, said to PCMag recently.

Since November Isis has revamped its purpose of creating an independent mobile payments processor to becoming a mobile payments "manager" that works with any bank, carrier or phone manufacturer—which is exactly how Google describes Google Wallet.

For more, see our hands-on with Google Wallet. Also be sure to read "Is Google Wallet What Mobile Payments Need to Succeed?"

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