Google Wallet snafu won't hurt adoption, Isis CEO says

Michael Abbott, who helms a rival digital-wallet service, said hiccups are bound to occur with new services, and applauded Google for quickly fixing security gaps.

Google Wallet in action. Marguerite Reardon/CNET

BARCELONA, Spain--You would think Michael Abbott, who runs a joint venture aimed at deploying mobile-payment services across the nation, would want to take a shot at Google and the early stumbles it's had with its rival digital wallet.

You'd be wrong.

"I applaud Google for addressing the problem quickly," Abbott said in an interview with CNET today. "It's best for the industry if we move on."

Isis, a joint venture backed by AT&T, Verizon Wireless, and T-Mobile USA, has taken a slow, methodical, and some would argue frustrating, path toward deploying mobile-payment services, which allows someone to tap their phone at cash registers to pay for retail goods or services.

The strategy has certainly paid off in terms of attracting a decent number of allies, including BarclayCard, Capital One, and Chase, which announced their intent to work with Isis yesterday.

By comparison, Google has zipped through the deployment of its Google Wallet service, which launched last summer. Google, however, has a strong slate of partners as well.

But its speed has come at a cost. Google has hit a few snags, including a major one a few weeks ago, which left users with potentially exposed personal and financial information. Researchers initially found a complicated way to crack the personal identification number , and a much simpler workaround surfaced a bit later.

The security hole left Google with a black eye and called into question whether consumers would ever be comfortable enough to embrace mobile payments.

But Abbott said that he didn't think the security gaffe would have major repercussions with consumers, and expressed his confidence that mobile payments would eventually be a routine chore.

"There will be hiccups with any new service," Abbott said. "Time and experience will heal everything."

As previously reported, Abbott is a fan of any service that promotes the awareness of mobile payments, whether that be Google Wallet, PayPal, or Visa's digital wallet initiative.

While Google wants to maintain customer data for its use in serving mobile ads and recommendation, Isis is taking a different path and acting as a neutral platform that credit card companies, banks, and merchants would want to work with. Unlike its earlier attempt to take a cut of each transaction, Isis now aims to make money by charging companies to run on its platform, essentially acting as a service provider. The company no longer expects to collect a fraction of every payment.

It's this neutral stance that has Abbott in such a Zen-like state about other competing digital wallets. Isis isn't necessarily creating its own wallet; it creates the platform and services that allow others to do so.

The venture's strategy is about what you'd expect from the even-keeled Abbott, who can sit through criticism of his plans and still happily talk about the opportunities that he sees in the area. A lot of his effort has been focused on striking partnerships, and he said more would come.

The deals add to the flexibility of its service. Users will be able to choose between the three carriers, a number of handsets, and four major credit card networks: Visa, MasterCard, American Express, and Discover. Google Wallet, meanwhile, only works on Sprint Nextel's Nexus S, and unlocked versions of the Galaxy Nexus, which has its wallet function disabled on Verizon Wireless .

Isis is still on track to launch trials in Salt Lake City and Austin, Tex., by the middle of the year. The company plans a massive education campaign in those two cities intended to alert merchants and consumers of the benefits and capabilities that come from a digital wallet--something he said previous attempts at mobile payments overlooked.

Abbott said carriers will sell more smartphones with NFC chips, which will allow for mobile transactions. While he doesn't know which models will get NFC, Abbott insists they'll be popular.

During the Isis trials, people with these NFC-enabled phones will be able to take advantage of the tap-and-go capability and the digital wallet in other cities. In New York, for instance, taxi cabs and drug stores will be able to accept Isis's digital wallet.

Don't hold your breath for Isis to expand its official deployment elsewhere. Abbott said he didn't know how long the trials would last, as data from the trials will determine how Isis proceeds with broader adoption.

"We know we have to be flexible on things like this," he said. "We're like any startup--you need to be able to change."

An odd thing to come from a business that came out of companies with a reputation for their plodding pace.

 

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